Web merchants are offering ways to lure in customers as online retail sales are expected to jump 25 percent this holiday season.
Posted Nov 25, 2005
Black Friday is a well-known event for brick-and-mortar retailers to attract new customers and to offer bargains to returnees, but the Monday on the other side of the weekend is when online retailers, including those that have online and physical presences, prepare for the start of the holiday shopping season, according to Scott Silverman, executive director of Shop.org, an association of online retailers and online solution providers. Shop.org is a division of the National Retail Federation.
"It's not necessarily the biggest shopping day of the season for online retailers, but it is the day that they start seeing a major increase in business," Silverman says. According to Forrester Research, U.S. online retail sales this holiday season will hit $18 billion, a 25 percent increase over last year.
Even if economic worries dampen consumer spending, there will likely be a healthy increase in online sales: 2.5 million new households are expected to begin shopping online in 2005. In addition, a greater number of retailers will use the traditional lure of free shipping to entice consumers to spend more, albeit with minimum spending thresholds to ensure profitability. Last year, 25 percent of online holiday shoppers indicated that they purchased more online to avoid shipping charges. According to Silverman, 79 percent of retailers that are members of Shop.org will offer free shipping this year for shoppers who "meet certain conditions" (usually a minimum purchase), up from 64 percent last year.
In addition to the shipping, many online retailers will have other promotions that will begin on Cyber Monday, while others have scheduled major site upgrades to be completed by that time, all with the idea of attracting more customers. For example, CompUSA has a one-day online sale offering a 17-inch LCD monitor for under $180, $100 off on select photo printers, and a 10-inch portable DVD player for under $230. Sierra Trading post is offering 10 percent off on all Web-exclusive items.
Additionally, a week before Cyber Monday Froogle, Google's bargain online shopping site, added a news feature that enables shoppers to search over the product inventory of brick and mortar stores in the shopper's neighborhood to compare online deals and local sales, all at the same time.
In addition to technology improvements many online retailers hire additional employees for fulfillment or customer service for the holiday season, Silverman says. "The staffing level of some [online retailers] is double or triple in December what it is in July."
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