NRF: E-retailers expect improved holiday sales

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Online retailers are expecting improved sales volume this holiday season, but they are still ramping up their marketing efforts, especially free shipping offers, according to a survey from the National Retail Federation.

Nearly two-thirds (63.8%) of online retailers expect sales to grow by more than 15% this holiday season over last year's, according to a poll by Shop.org, the online arm of the NRF. Only 6.4% of e-retailers expect flat or dropping sales, compared to 20.3% who expected that last year, according to the study of 51 online retailers, conducted last month.

Online stores won't skimp on marketing this year, especially social media efforts and site improvement. The poll found 72.5% of retailers have invested in the company's Facebook page before the holidays and 43.1% spent money on a Twitter campaign or feed. The most popular site improvements were cross-selling on product pages (54.9%), site search (also 54.9%) and customer ratings and reviews (52.9%).

However, free shipping remains the main promotional tool among e-retailers. More than four in five (84.8%) plan to offer it as a holiday incentive, while 31.4% said they will begin offers earlier this year than last year. Also, 36.7% said their budget for free shipping offers is higher than last year.

The NRF, like other industry groups, has found consumers are still cautious and shopping around for deals. The group is projecting consumer holiday spending will rise to $447.1 billion, 2.3% above last year. However, that number is still below the 2007 total, noted Jack Kleinhenz, chief economist at the NRF.

Consumers still feel they are in a recession, so retailers will have to coax them with promotions and offers, Kleinhenz said on a conference call. Consumers are looking for added value and will buy when they find it, he said.

“I never count the American consumer out,” he said. “Consumers can really surprise us.”

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