Q4 online sales growth may not live up to expectations, Forrester warns
Online holiday retail sales will grow 20% over last year to $13.2 billion from $11 billion, projects Forrester Research Inc. in a new report Online Holiday Sales 2004: Proceed with Caution. While that growth is still good, it’s not what many retailers are expecting. Carrie Johnson, Forrester analyst and author of the paper, says retailers should re-align their projections as Q4 shopping gets under way. “Retailers need to dial back their projections,” she says. “The growth will still be there, but the online groups have been held up as the golden children of retailing because they’ve been growing while stores have not. But there is potential for problems if they expect 35% growth and get 20%.”
Johnson bases her projections on a decline in retail and travel sales from Q1 to Q2 this year, from $31 million to $33 million. Some retailers reported similar drops, including Amazon.com Inc., where sales fell from $1.5 billion in the first quarter to $1.39 billion in the second quarter.
Johnson says this year’s scenario is a reflection of 2002, when retailers pushed shoppers into stores. “Because the stores have the bigger spotlight, with Wall Street analysts focusing on comp-store sales and not necessarily on web sales, a lot of retailers may use their web sites to push customers into stores,” she says.
She adds that the slowing growth in online sales is a reflection of the overall retail market, a development to be expected as online retailing becomes more mature and a great part of shoppers’ spending.
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