Retailers use new web features to hook holiday shoppers

05 Nov '08

4 min read

Though the holiday season will be challenging across the board, online retailers are expecting more than coal in their stockings. According to results of the 2008 eHoliday Study, conducted by Shopzilla for Shop.org, more than half of online retailers (56.1%) expect their holiday sales to increase at least fifteen percent over last year. However, the rate of growth is slowing: three-fourths (77.5%) of retailers surveyed last year expected their sales to grow more than 15 percent.

“Online retailers are resilient, but not immune, to the challenges of this holiday season,” said Scott Silverman, Executive Director of Shop.org. “Retailers will be heavily promotional to attract shoppers on a budget, but have also invested in new site features to improve the online buying experience.”

Despite an increase in transportation costs, retailers do not plan to cut back on popular free shipping promotions. This year, the majority of retailers (78%) plan to offer free shipping with conditions* at some point during the holiday season, consistent with last year's levels. Retailers are compensating for increased shipping costs by renegotiating terms with shipping providers (40.4%), closely managing company headcount (33.3%), and reducing other promotions (15.8%). In addition, one-fifth (21.3%) of retailers say they will require a higher purchase amount for customers to be eligible for free shipping and one in ten (10.6%) will cut back on usage of free shipping with no conditions.

In addition to free shipping promotions, many retailers have rolled out new website features to improve the customer experience. Features like improved site search, which 42.9 percent of retailers added or improved since last holiday season, will help customers navigate sites more easily. Other features like product video (42.6%) and customer reviews (32.7%) can give shoppers more information to make buying decisions. For price-focused shoppers, retailers have added and enhanced both clearance sale pages (27.1%) and featured sale pages (31.3%). In addition, retailers continue to experiment with social networking as nearly one-fourth (25.0%) of online retailers added a Facebook page this year.

As in previous years, consumers acknowledge that 24-hour shopping convenience is one of the main reasons why they choose to buy online (58.6% this year vs. 58.5% last year). Shoppers' other top reasons for buying online instead of in stores include not wanting to fight crowds (41.1%), easy price comparisons (36.4%), and free shipping (33.3%). Also, nearly one in four shoppers (23.1%) says they are spending more online due to high gas prices, more than double the number which said the same last year (9.0%).

Consumers who plan to spend less online this year seem to be reacting to their economic circumstances, not to previous online experiences. According to the survey, one in five shoppers (20.1%) says they simply have less money to spend this year for the holidays, while 10.6 percent cited a poor economy as a factor. One in ten (11.0%) plans to spend less online this year due to high shipping charges.

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