Study: More consumers to shop online this holiday season

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More consumers will shop online this year for holiday gifts than last year, according to a survey from e-commerce services provider MarketLive and consultancy The E-tailing Group released October 19.

Of the 1,000 consumers queried for the 2009 Mindset of a Multi-Channel Shopper Survey, 55% said they plan to do their holiday shopping via the Web this year, compared to 49% last year.

The report also indicated that the online channel is gaining wallet share, with 26% of shoppers planning to purchase more gifts this year using the Internet. Last year, only 21% planned to buy more gifts online.

Consumers cited the time saved by shopping online as the most popular reason for bypassing bricks-and-mortar stores, with 85% of respondents saying it is their primary reason for shopping online. Forty percent of shoppers also cited wish lists and 38% named online reviews as factors in their decisions to shop online.

Retailers “have to be careful about discounting,” said Ken Burke, chairman, founder and chief evangelist at MarketLive. Last holiday season, retailers aggressively discounted prices to move products off the shelves, but they undercut their profits and brand reputations while training consumers to expect such discounts, he said.

Nearly nine in 10 consumers also said they are willing to pay full price for hard-to-find products, convenience and good customer service.

“While consumers are telling us they love value and that shipping costs are an issue, they are still willing to pay full price for service,” said Burke.

The survey also found that 62% of shoppers report high shipping charges are the primary reason they will not buy more online. The finding reflects why free shipping promotions are one of the most popular discounts offered by online retailers, said Burke, who added that the desire for good customer service “came up again and again” in the survey.  

Consumers' desire for quality service bodes well for larger retailers that have fully integrated their online and offline operations, Burke notes. While many retailers have reduced their inventory levels from last year — putting them at risk of running out of stock on more popular items — bigger merchants can make it easy for consumers to find an item online.

“Anybody that has done multichannel integration with inventory will win,” said Burke, adding that “some of the smaller retailers are sorely lacking” in this area.

These findings concur with last week's report from Shop.org and Forrester Research, “The State of Retailing Online 2009: Profitability, Economy and Multichannel,” which indicated that 34% of online retailers gained market share from brick-and-mortar specialty stores this year.

The study by MarketLive and E-tailing Group also found that mobile commerce and social media will play a larger role in consumers' shopping plans this year. One in three shoppers plans to use a mobile phone for shopping-related purposes, such as price checks and redemption of promotions this holiday season. Social networking sites will influence the shopping behavior of 37% of online shoppers this year versus 24% last year, according to the report.

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