RealTime IT News

Holiday Shoppers May Spend 10% or Less of Budgets Online

Fears that online merchants will be out of stock or deliver items late are expected to prompt a majority of online holiday shoppers to spend less than 10 percent of their gift budget online, according to a new research report.

The report from Jupiter Communications Inc. said those fears will likely drive many of an estimated 20 million online holiday shoppers -- 20 percent of the online population -- to favor merchants from whom they have bought in the past, making the goal for online retailers "to turn those experimenting with holiday shopping online into loyal shoppers."

More than 1,300 U.S. online shoppers were surveyed in late November and the majority said they plan to be conservative in shifting their holiday budgets online. Fifty-one percent of survey respondents said that they would spend less than 10 percent of their total holiday shopping budget online.

"We expect that consumers are going to spend around $6 billion this holiday season, representing significant growth over previous years, but we need to put this in perspective. The amount is still only a small percentage of what they expect to spend over the holiday season," said Fiona Swerdlow, senior analyst and director of Jupiter's Digital Commerce Strategies practice.

Of those surveyed, 51 percent indicated that site recognition and trust are key factors in selecting online merchants from which to buy. Thirty-nine percent said that they would buy from online merchants whose stores or catalogs they had bought from off-line.

Thirty-seven percent said that they would buy from online merchants from which they had bought online in the past.

"Established merchants could lose the holiday battle," said Ken Cassar, a Jupiter analyst. "Their greatest challenge is living up to the expectations that consumers have toward their brands. Nailing the basics such as site performance, inventory, fulfillment management, and customer service becomes more crucial than ever."

Online retailers should focus on guarantees, dependability and security, Cassar said.