Online shopping to grow this holiday season: study

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Sixty-two percent of more than 1,500 U.S. small businesses said they anticipate a strong holiday according to Constant Contact's small business holiday outlook survey.

This second annual study by Constant Contact also found that 78 percent of U.S. small business owners surveyed said the December holidays are important to their yearly earnings.

"For many small businesses, holiday sales make up a large share of their yearly revenues and e-mail marketing is a cost effective way for them to stay connected with customers and drive profits," said Gail Goodman, CEO at Constant Contact, Waltham, MA,

In order to serve the expected high turnout of holiday shoppers, 68 percent of small businesses will run seasonal promotions mostly online, and 20 percent have hired or will hire additional employees.

Eighty-one percent of those surveyed expect consumers to make more holiday purchases online in 2006 and to capitalize on this most small businesses will use online marketing methods to promote their holiday offerings.

Of the 68 percent surveyed that will run seasonal promotions, 82 percent will use e-mail marketing in their promotional mix, 50 percent will use other online marketing tactics like online advertising and paid search, and 35 percent will use direct mail.

Small business owners this year are far less concerned about the effect of high energy costs, with only 22 percent of them very concerned about its effect down from 35 percent last year.

In addition, while last year's survey found that 65 percent of small business think that high energy costs will lead to more online purchases, only 56 percent of small business owners found this to be true.

"Many business owners expect consumers to make more online purchase this holiday season, and as a result the majority are using online methods like e-mail marketing for promoting holiday specials, coupon offers and discounts," Ms. Goodman said.

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