October 26, 2011, 4:10 PM

Low prices and free shipping make for prosperous holidays

A Deloitte survey also finds that more consumers will shop online this year for presents.

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The average consumer will complete one-third of her holiday shopping with online retailers this year, according to a survey of more than 5,000 U.S. consumers conducted by consulting firm Deloitte. 11% of online shoppers say they will spend more online this year than last. Those consumers cite convenience (73%) and better prices (63%) as the main reasons why they’ll do more shopping with e-retailers in 2011.

More consumers say they’ll shop online this year, 48% compared with 35% a year ago. And fewer consumers say they’ll shop at discount department stores, 48% compared with 58% a year ago, Deloitte says. When it comes to the most likely venue where consumers will buy their holiday presents, the web ties with discount department stores.

When shopping online consumers say low prices (48%) are the most important factor in helping them decide where to buy, followed by free shipping (20%) and selection (11%). 69% of consumers who will shop online say they are more likely to buy from an e-retailer if it offers free shipping.

The lackluster economy is driving deal-seeking consumers online. 68% of respondents to the Deloitte survey say they plan to change the way they shop to save money this holiday season and 51% of those consumers say they’ll be going online to find better prices on the gifts they want to buy, up from 41% who said the same a year ago.

Deloitte also says consumers from more affluent households will spend a greater percentage of their holiday budgets online than will less affluent consumers—and increase their overall holiday spending. Households with incomes of $100,000 or more will spend 39.6% of their holiday budgets online and spend 3.5% more overall this holiday than last year. Consumers from households earning less will spend 31.3% of their budgets online and spend 12.3% less overall on holiday purchases.

But early-bird shoppers may not find the deep discounts they hope for online this year, according to another report.

MarketLive Inc. says e-retailers are limiting the depth of discounts they are offering early in the season. The e-commerce technology provider reviewed 100 web sites of the e-retailers ranked from No. 1 to No. 150 in the Internet Retailer Top 500 Guide and found discounts ranging from 15% to 30% during October, a narrower range than the 10% to 40% offered at the same time a year ago. MarketLive chairman Ken Burke says he expects e-retailers will offer fewer large discounts this season than last. “Due to the lower inventory levels this holiday season, consumers will not see the level of great bargains and super deals online that we have seen in past years,” he says. “Consumers are going to wait it out, so we expect sales to be soft in the early weeks of the season, making this a late holiday season for retailers.”

But retailers can’t ignore discounts, either. A MarketLive survey of more than 1,000 consumers shows that e-retailers will have to offer some form of discount to convince more than a third of consumers to buy. 37% of consumers say they will not pay full price for gifts this holiday season. 19%, however, say they’ll pay full price if retailers offer free shipping. MarketLive did not provide year-over-year comparable data for consumers’ willingness to pay list price. 

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