ComScore: Online holiday sales to increase this year

Consumers are expected to spend $19B online during the holiday shopping season

Online consumer spending during the November to December holiday shopping season is expected to reach $19 billion, up 24% from the same period last year, according to ComScore Networks Inc.

ComScore's estimates are in line with projections from other research firms, which have also said recently that holiday spending online is expected to show a solid increase this year (see "Surveys: Online shopping expected to be merry at holiday time").

"Expectations across all channels for this holiday season have been dampened slightly by high gas prices and wavering consumer confidence," Gian Fulgoni, chairman of ComScore Networks, said in a statement. "However, e-commerce will remain strong as consumers continue to shift more of their holiday spending to the online channel because of the Web's convenience and the savings available through its price-comparison capabilities -- not to mention the ability for consumers to save on fuel costs by cutting back on the need to drive to retail stores."

The strong growth of e-commerce in traditional retail categories, such as apparel and accessories, home and garden, and jewelry and watches, indicates that consumers are now comfortable shopping for those products online, he said.

As consumers search for bargains, they turn to comparison-shopping sites and traditional search engines to help them find lower prices or hard-to-locate items, according to ComScore. Comparison-shopping sites make up one of the fastest growing categories online, attracting more than 54.7 million visitors in October, up 52% from last year.

"Comparison shopping and Web search engines not only provide consumers with an efficient means for navigating this complex shopping environment, but also cause online retailers to engage in more competitive pricing," Fulgoni said.

During last year's holiday season, ComScore found that companies with familiar names in off-line retail, such as Wal-Mart, Target and Best Buy, saw sales grow significantly more than lesser-known, online-only merchants. Driven by strong brands, online/off-line promotions and in-store pick-up and returns, multichannel retailers will likely do better than many of their online-only competitors again this year, ComScore said.

"Pure online brands will continue to do well this holiday season," Fulgoni said. "But multichannel retailers will once again post the highest overall growth in online sales as newer online shoppers turn to the brands they trust, and consumers recognize the benefits of in-store service, including post-holiday returns."

Copyright © 2005 IDG Communications, Inc.

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