Online Consumers to Spend Less in Stores for Holidays

November 21, 2008

This article is included in these additional categories:

Analytics, Automated & MarTech | Retail & E-Commerce | Women

Online consumers intend to spend less in stores during this holiday season than last, but slightly more online – where they expect free shipping and deals not available in stores, according to The Consumer Internet Barometer from The Conference Board and TNS, reports Retailer Daily.

Bargain hunting will remain the driving force behind online sales, notes the quarterly report, which surveys 10,000 households across the country and tracks who’s doing what on the internet.

“Free shipping, exclusive online deals, coupons and discounts are among the incentives consumers will be expecting this season,” said Lynn Franco, director of The Conference Board Consumer Research Center.”

Online sales across retail channels are forecast to grow 9% this holiday season, compared with a total retail sales forecast of just 1.5% growth this year in the key holiday shopping retail sectors, according to TNS Retail Forward. It expects online sales to reach $42.5 billion in the fourth quarter, up $3.5 billion from last year.

Below, some of the findings from the Consumer Internet Barometer.

In-Store vs. Online Shopping

Even though online shoppers plan to spend less in stores this holiday season, planned spending online is up slightly compared with the same quarter last year.

  • Online households planning to spend more than $500 in stores declined to 16% from 21% last year.
  • Those planning to spend more than $500 online rose to 5% from 4% last season.
  • Those planning to spend between $100 and $499 in stores declined to 57% from 61% last year, while those planning to spend that amount online edged up to 36% from 35% last year.
  • Online households planning to spend less than $100 in stores increased to 22% from 16% last year. Those planning to spend that amount online rose to 32% from 29%.

“Despite slowing retail sales in many channels this holiday season, online shopping is likely to be one of the few bright spots this holiday season,” said Mary Brett Whitfield, director of the Retail Forward Intelligence System of TNS Retail Forward.

Retail and Catalog Sites Most Popular

This holiday season, books, clothes, movies and toys will be the most popular items on the consumer’s internet shopping list.

The most preferred shopping sites are those operated by retail store and catalog operators such as Walmart.com or BestBuy.com, followed by online retailers such as Amazon.com and online auction sites such as eBay.com.

Women shoppers are shifting from retail and catalog sites to online retailers this year, perhaps in search of better prices:

  • Female shoppers who preferred retail and catalog sites dropped to 42% from 48% in 2007, while those who prefer online retailers have grown to 40% from 34% last year.
  • Site preferences for male shoppers changed only slightly.

Shopping Habits Differ by Gender

The survey identified five types of online shopper:

  • Self-identified bargain hunters account for 44% of shoppers who made an online purchase in the past three months, the same as a year ago.
  • Die-hard internet shoppers have increased slightly and represent 17% of shoppers. They are the second-most common type of internet shopper.
  • Traditional shoppers, who occasionally shop online but prefer the familiarity of real stores, account for about 15% of online shoppers.
  • Last-resort shoppers, who buy online only when products are unavailable in stores, rank fourth on the list and represent 14% of online shoppers.
  • Last, hurried shoppers, who point and click only when pressed for time, represent 10% of online shoppers.

Among bargain hunters, men are more likely than women to surf the internet searching for deals. Only 41% of women compared with 48% of men are self-proclaimed bargain hunters.

Last-resort shoppers and hurried shoppers, however, are more likely to be women. About the same proportion of men and women are internet die-hards and traditional shoppers.

Consumers More Cost-Conscious

The ongoing sentiment among online holiday shoppers is that free shipping, coupons, and discount offers would encourage them to spend more online.

  • Shipping charges, which are the most frustrating aspect of online shopping, tend to frustrate women more than men: 47% versus 38%.
  • About 93% of women versus 87% of men say free shipping would serve as a motivation to spend more online this holiday season.
  • More than 71% said special offers and deals not available in stores would boost their online spending, with little difference between men and women.
  • More than 70% of women and 68% of men said they would be willing to spend more if merchants offered coupons/discounts.
  • Also, 48% of women say they would spend more online if sites offered free return postage, compared with 39% of men who felt this way.

About the survey: The Consumer Internet Barometer is based on a quarterly survey of 10,000 households. A unique sample is surveyed each quarter. Return rates average 70%, which ensures representative data. Data is also weighted to reflect the latest US household demographic information. The latest survey was conducted during the fourth quarter of 2008. TNS is part of the Kantar Group, which is itself a wholly-owned subsidiary of WPP Group plc.

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