Web Sellers Use Social Media

The economy is not only impacting shoppers, it’s affecting online retailers, too. According to results of Shop.org’s eHoliday Study, conducted by BIGresearch, shoppers will see changes in retail marketing and promotions this holiday season, in response to economic uncertainty. With an understanding that many of today’s shoppers use Facebook and Twitter regularly, and because these tools are more cost effective than traditional advertising, 47.1 percent of retailers surveyed will be increasing their use of social media this holiday season.

More than half of retailers surveyed said they have added or improved their Facebook page and Twitter pages this year, according to 60.3 and 58.7 percent of retailers. Two thirds said they have added or enhanced blogs and RSS feeds. In addition, to provide consumers with an extra incentive to start shopping, one third of retailers said they would offer holiday deals earlier this year, a forecast that has already been born out. As another sign of the times, free shipping offers abound this holiday season. Four out of five online retailers said they would offer free shipping with conditions, at some point during the holiday season. More than half said they planned to offer free shipping without conditions. More than a third said their budgets for free shipping are higher than last year, and 30 percent expect free shipping offers to start earlier than a year ago.

“Retailers know that times are tough, so they have created promotions and incentives to help Americans save money this holiday season,” said Scott Silverman, executive director of Shop.org. “From free shipping to Facebook, online retailers are combining new initiatives with tried and true tactics to make their companies stand out.” Online retailers are also compensating for the economy by making operational changes to help them protect their profits.
According to the survey, 41.4 percent of retailers have scaled back on inventory levels, and 22.9 percent have hired fewer people in their stores.

While online growth is expected to slow this holiday season, it remains a bright spot in retail. According to the survey, 45.8 percent of web retailers expect their holiday sales to increase at least 15 percent over last year, while one third expect sales to grow up to 14 percent. As a testament to the economy and the maturity of online retail, just one in five online retailers expect sales to be flat or decline. In addition to a strong focus on sales and free shipping, many web retailers have revamped their websites this holiday season to make it easier for people to shop. 45.2 percent have added or revamped their sites’ shopping cart; 44.3 percent have enhanced their search capabilities; 42.9 percent added suggested items to their site; 40.6 percent added customer ratings and reviews, and 37.1 percent featured sale pages.

Largely due to the convenience of the web, more than one quarter of online shoppers said they plan to spend a larger portion of their holiday budget online this year. In citing reasons for spending more online, 41.9 percent said they could shop at all hours of the day, while 34 percent said they found it easier to compare prices, and nearly as many attributed it to Americans’ insatiable appetite for free shipping. Nearly a third said they will spend more online because it’s simply more convenient for them. Another 24.9 percent said they don’t want to fight crowds in stores, and 16.7 percent said it’s easier to find items online than in stores.

“In a year where every penny counts, many people will start their holiday shopping online to find deals, search customer reviews to select products, and get gift ideas,” said Phil Rist, EVP of strategic initiatives for BIGresearch. “The benefits of online shopping far outweigh the drawbacks, as far as most shoppers are concerned,” he noted. With online retailers diversifying payment options, customers have more ways than ever to pay for holiday gifts. Two thirds of shoppers will use a credit card for some online purchases this holiday season. A third said they will also use a debit card, and 33.9 percent said they’d use PayPal for online purchases. In addition, 11.5 percent of shoppers plan to use a gift card or gift certificate to pay for holiday items online this year.

This is the eighth annual eHoliday study, which offers a snapshot of the holiday activities of both large and small web retailers, many of which have been in business for at least ten years. It also includes the sentiments of online holiday shoppers. The Study, conducted by BIGresearch for Shop.org, surveyed 2,623 consumers nationwide.