Interactive Media Associates
October 2008 VOLUME 6 ISSUE 5  
Will the Grinch Steal the Online Holiday...
Top Ten Questions When You're Considering a Redesign
IMA Update
Will the Grinch Steal the Online Holiday...
by Len Muscarella, President

Since the dawn of the new millennium, one the most dependable economic tracking numbers has been the year-over-year growth of online holiday shopping. You could depend on 20 percent growth each year, even in years when traditional retail stores saw almost no growth.
That trend is likely to end in 2008, according to more than one reputable forecast. Both and Lehman Brothers are predicting that the growth in online holiday sales will be no better than 8-10 percent this year. (See tables below.)
To be fair, the expected drop in growth is not solely due to the economic downturn. As the online marketplace matures, increases that were common during its growth years will be nearly impossible to sustain. (Growth during the second quarter of this year dipped into single digits for the first time, according to an analysis by Burst Media.)
But the larger economy is surely the driving factor here. A survey by The National Retail Federation (NRF) found that consumers are planning to spend $832.36 on holiday-related shopping this year, up only 1.9 percent over last year’s expenditure of $816.69. That represents the lowest increase in planned consumer spending since the survey began in 2002.
For online sellers, one bit of data from the NRF survey should be comforting. Shoppers said the one factor that will play the biggest role in their buying decisions this year is price. Online’s lower overhead and more efficient marketing should enable it to compete with brick-and-mortar retail, and make further inroads in the holiday shopping habits of consumers.
US Retail E-Commerce Holiday Season Sales, 2003-2008 (billions and % change)


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