Groupon says its focus is on the bottom line, rather than top-line growth.
While stores do their festive best to attract shoppers, many consumers will shop online from the comfort of home this holiday season, the National Retail Federation says.
Festive shop windows and heavily promoted sales will draw some consumers to bricks-and-mortar stores this holiday shopping season. But a growing number of consumers, including many of the biggest spenders, will shop online from the comfort of their homes, according to an annual survey released last month by the National Retail Federation, a retailer trade group.
The NRF's 2011 Holiday Consumer Intentions and Actions Survey finds that 46.7% of respondents plan to purchase holiday items online this season, up from 43.9% a year ago. What's more, the survey of 8,500 consumers shows that online shoppers plan to spend more than the typical consumer. Web shoppers will spend an average of $857.59 on gifts and seasonal merchandise, or 21.7% more than the average consumer across all retail channels, the survey suggests. And online shoppers will spend an average of $636.28 on gifts for others, 23.3% more than the average consumer.
68% of retailers, meanwhile, expect their online sales to grow at least 15% this holiday season, up from the 64% who expected the same growth a year ago, according to the Shop.org eHoliday survey conducted by BIGresearch. Shop.org is the online retail division of the NRF.
Regarding other holiday season strategies, the eHoliday survey found:
- 92.5% of retailers plan to offer free shipping, up from 84.8% a year ago, and to start free shipping offers earlier in the season;
- 52.9% of retailers plan to start their marketing and promotions by Halloween, up from 40% a year ago; another 37.2% will begin marketing by mid-November;
- 51% of retailers say they have significantly invested in mobile-optimized web sites; 19.6% have invested in tablet apps; 35.3% have invested in QR codes placed in offline advertising, such as magazines and billboards;
- Among retailers who regularly use social media platforms, 72.5% say they have invested in Facebook and 41.2% in Twitter for the holidays.
When it comes to all holiday-related shopping activities—including checking prices, researching products and making purchases—online shoppers expect to complete 50.5% of those tasks online this year, according to the NRF holiday survey. All consumers, including those that don't plan to shop online, expect to use the web for 36% of those activities, up from 32.7% in last year's NRF survey.
A less cheery note for stores
That increase in online shopping will mean more web sales in the fourth quarter, $60.4 billion, predicts research and advisory firm Kantar Retail. That would be a 13.5% increase from the $53.2 billion spent by online shoppers during the same period last year. By comparison, total retail spending during November and December will reach $465.6 billion, up 2.8% from last year, according to the NRF.
But the news isn't all cheerful for the web, either. Kantar's projection of 13.5% online growth this holiday shopping season is three percentage points 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. It predicts only a 2.8% growth in total retail sales for the 2011 holiday shopping season—just half the 5.6% actual growth in all retail sales that Kantar reported for last year's holiday season.
Mobile phones will also be important holiday shopping tools. Nearly 40% of the consumers surveyed by the NRF say they own a smartphone, and 52.6%, say they will use their phones to help them shop this holiday season.
10.5% of NRF survey respondents say they own a tablet computer such as an iPad; 70.5% of those consumers say they plan to research products with it and 34.8% say they'll make a purchase on a tablet.
42.2% of online shoppers in the NRF survey cite sales and 20.4% selection as the key factors in convincing them to shop with a retailer during the holidays. In the Shop.org survey, 43.2% of consumers cite the 24-hour convenience and 36.3% free shipping when asked why they plan to shop online. "Shoppers are meticulously calculating the best ways to stretch their dollar," says Matthew Shay, president and CEO of the National Retail Federation.
Web and mobile retailers will have a better chance than ever to capture those carefully spent holiday shopping dollars.