CEO Sharon Price John says Build-A-Bear’s old e-commerce system is a big reason for disappointing online sales in December.
Kantar predicts 13.5% growth for online holiday sales, a lower rate than for last year.
U.S. web sales during the fourth quarter will hit $60.4 billion, up 13.5% from the $53.2 billion spent by online shoppers during the same period last year, predicts Kantar Retail. The retail research and consulting firm, however, notes that the growth rate for the 2011 holiday shopping season is likely to be lower than the 16.5% increase registered in 2010, thanks in part to declining consumer confidence.
That uneasiness among many consumers will have an even bigger impact on store sales, Kantar says, predicting only a 2.8% growth in total retail sales for the 2011 holiday shopping season. That would be half the 5.6% actual growth in all retail sales that Kantar reported for last year’s holiday shopping season.
In the bricks-and-mortar world, the strongest growth will come from dollar stores and jewelry stores, each projected to grow sales 4.5% in the fourth quarter over Q4 2010, Kantar says. Sales at furniture and home furnishings stores will decline 1.5%, with consumer electronics stores set to absorb a 1.0% decrease. Meanwhile, department stores can expect a 1.0% increase in sales this holiday season, down from 3.0% in 2010. Sales at big-box and mass merchandise retail stores will increase 2.0%, down from 2.5% a year ago, while sales at apparel and shoe stores will increase 1.7%, down from 5.7% a year ago, Kantar says.
Declining consumer confidence threatens holiday sales, says Frank Badillo, Kantar Retail senior economist. “The probability is high that this will lead to another recession unless some positive shock—such as government stimulus—keeps the period of heightened uncertainty short and quickly starts to life consumer and business confidence,” he says.
Half of consumers plan to spend about as much as they did last year on holiday gifts, 35% less, 9% more and 6% say they don’t buy holiday gifts, according to a Kantar survey of 4,004 consumers conducted in August.
Another survey suggests higher-income consumers are more likely than others to maintain their 2010 levels of holiday shopping, and will do more of it online. While 62% of all consumers plan to spend less this holiday season, 54% of consumers with annual household incomes of $75,000 or more will spend as much as last year, according to web marketing firm Steelhouse, which based its findings on an online survey of 1,000 U.S. adults.
Moreover, 32% of higher-income consumers also say they will spend more time browsing for holiday gifts online instead of heading to malls this year, Steelhouse says. 28% is the average across all incomes.
Still, many consumers with higher incomes appear unlikely to shop online without a discount or freebie. 13% of higher-income shoppers say they’ll use coupons for the first time this holiday season, greater than the 11% average across all income levels. 36% of higher-income consumers say they won’t buy this holiday season without a discount or free shipping, compared with 31% for all consumers surveyed.