Daily Research News Online no. 4865 - Holiday Spend Falls, But Online Sales Thrive

Holiday Spend Falls, But Online Sales Thrive

November 23 2005

Along with the Christmas decorations comes a flurry of Christmas spending forecasts. Research from Maritz suggests consumers plan to spend less than last year, while comScore and Hitwise predict a boom for online retailers.

Maritz predicts decreased spend
A new Maritz Poll finds one in four US shoppers saying they will spend less on holiday gifts this year. Respondents plan to spend an average of $791 on gifts, compared with last year's $823.

70% of those cutting back said rising gas prices were a factor, and this group will spend an average of $373 less this year. The average price for a gallon of regular grade gasoline was $2.60 at the time of the study.

In addition, a fifth of those who plan to spend less said charitable donations to hurricane victims are affecting their holiday spending. The average reduction for this group is $217.

Gloria Park Bartolone, VP of Retail Research at Maritz Research, says the company normally sees predictions of increased sales each holiday season. 'This is a different kind of year, with the country experiencing two economically damaging natural disasters and consumers contending with higher gas prices.'

This Maritz Poll was conducted by phone between October 18th and 31st with 2,007 randomly selected adults. The company is online at www.maritzresearch.com

Kids want fewer gifts
The Holiday Wish List and Habits survey from KidzEyes, a youth division of C&R Research, might come as a relief to parents. It says US kids are planning to ask for 20% fewer gifts than last year - although it is not clear whether the presents they want are actually worth less than in previous years.

38% of six- to 17-year-olds said they will ask for five or fewer gifts, compared with just 21% a year ago. Only 28% are asking for 11+ items, compared with 40% last year.

55% of kids said hurricane victims deserve the most gifts this year - nearly three times as many as those who named themselves as the most deserving. 51% say they plan to donate one of their presents to hurricane victims.

However, self-interest is surviving: Paul Metz, VP of C&R Research, says kids are still asking for specific items, and are 'very particular' about what they want.

The survey was conducted with members of the KidzEyes online panel, in co-operation with Funosophy, a toy industry consulting firm. The first wave of research - conducted between August 9th and 16th - yielded 2,208 completed surveys. The second - between October 12th and 18th - yielded 1,553 responses from among the same group of respondents.

comScore predicts US online shopping growth
comScore Networks' latest forecast is one of several that predict a Christmas boom for online retailers. It estimates that consumer spending on non-travel goods at US web sites will exceed $19 billion during the November/December holiday season - an increase of around 24% since last year.

The company notes that spending expectations as a whole have been dampened by high gas prices and wavering consumer confidence, but says consumers are continuing to shift their spending online.

comScore predicts that, as last year, familiar offline retail names will see greater online growth than online-only merchants.

At the same time, price comparison sites are also on the rise: attracting more than 54.7m visitors in October - a rise of 52% since last year. This growth is underlined by Hitwise data collected last week. Hitwise found that both Google and Yahoo! Search sent 25% more traffic to the ten leading shopping comparison sites than they did last year.

comScore will continue to track US online shopping throughout the holiday season. The company is online at www.comscore.com Hitwise is online at www.hitwise.com

UK online shopping surpasses last year
Online shopping is looking healthy across the Atlantic, too. Hitwise UK reports today that visits to retail web sites have already surpassed last year's peak. Last week saw 5% more visits than in the week ending 4th December 2004, which was last year's strongest online shopping week.

Heather Hopkins, Director of Research for Hitwise UK, says: 'At the current rate of growth, online retailers are set to have their best year yet.'

In the week ending 19th November 2005, UK visits to retail web sites accounted for 13% of all visits to the Internet - up 5% from the previous week. The fastest growing retail sub-categories were: Grocery and Alcohol (+8%), Ticketing (+33%) and Flowers and Gifts (+5%). The growth of ticketing sites reflects demand for Robbie Williams concert tickets, while Flowers and Gifts and Grocery and Alcohol sites are experiencing more seasonal growth.

Hitwise UK is online at www.hitwise.co.uk

US retailers target Cyber Monday
Another new study suggests that US online retailers are likely to experience a boom in sales next week.
According to research from BizRate Research, a division of shopping search site Shopzilla, for online retailers' association Shop.org, the Monday after Thanksgiving (dubbed 'Cyber Monday') is quickly becoming one of the biggest online shopping days of the year.

The eHoliday Mood Study says 77% of online retailers saw their sales increase substantially on last year's Cyber Monday. The biggest winners were jewellery/luxury retailers, with 89% of sites seeing substantial sales increases, and consumer electronics retailers (86%). Sites selling food and drink (83%) and furniture and home décor (80%) also saw above-average sales surges.

To encourage the surge this year, the study says 43% of online retailers plan to offer special promotions and discounts on Cyber Monday. 36% are also planning promotions on Thanksgiving Day, when most offline stores are closed.

The study is based on a poll of 1,891 online buyers (defined as anyone who has made an online purchase in the last twelve months) and 119 online retailers, all members of Shop.org. Research was conducted between September 23rd and 26th.

Shopzilla and BizRate are online at www.shopzilla.com.