U.S. holiday online sales will increase 18% to $26 billion: JupiterResearch

Consumers will spend $26 billion online during the holiday season, up 18% from $22 billion in 2004, according to the new JupiterResearch U.S. Holiday Forecast, 2005. Jupiter defines the holiday shopping season as November and December.

Jupiter’s number differs from that of Forrester Research, which earlier this week forecast online holiday sales of $18 billion, up 25%. Forrester defines the holiday shopping season as the period between Thanksgiving and Christmas.

An 11% increase in the number of online holiday buyers—including those who have not previously shopped online during the holidays—will be the primary driver in increasing spending, JupiterResearch said. A 4% up-tick in spending per online buyer also will contribute to the increase.

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However, although there will be strong overall growth, consumers have indicated they intend to increase spending in only five of 32 product categories, including consumer electronics, computers, and art and collectibles, according to Jupiter. In 2004, consumers said they planned to increase spending in virtually all categories.

In addition, only 18% of online holiday buyers say they plan to spend more overall during the holidays than they did last year, while 54% plan to spend the same amounts, and 28% plan to spend less overall.

In terms of online holiday spending, 36% of these consumers say they plan to spend more than last year, 48% plan to spend the same amount and 16% plan to spend less, Jupiter said.

Jupiter also found that while 56% of consumers said free shipping is more important this year than in the past, they will not buy items they had not intended to purchase because of an offer of free shipping. That means retailers may have to offer free shipping to capture sales equal to last year’s and to stem attrition while at the same time facing higher fuel surcharges on order shipments.

However, nearly one-third of online holiday buyers said they would be willing to pay for shipping to avoid malls and gas expenses.