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.

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