Holiday web sales this year will grow 13% over last year, fueled by an influx of new web shoppers and increased mobile shopping, Forrester Research Inc. said today in an annual forecast of online retail sales during November and December. The research firm projects web sales during those two months will hit $89 billion and account for 14% of retail spending during those two months.
That’s a slower growth rate than last year, and there are reasons for that, says Forrester vice president and principal analyst Sucharita Mulpuru says. “While that figure represents 30% of all the e-commerce spend in 2014, it represents a deceleration in growth due to a shorter holiday selling season and capacity constraints in the package delivery network,” she writes in Forrester’s forecast on online holiday sales released today. For the past three years, the web sales growth rate has been steady at 15% after growing 16% in 2010.
Forrester’s holiday sales growth estimate is similar to that of Deloitte LLP, which projected online holiday retail sales and mail order purchases in the U.S. would increase between 13.5% and 14.0% this year compared with 2013.
During the 2014 holiday season, Forrester also expects to see 3.4 million new web shoppers. “The holiday season is a strong opportunity for new customer acquisition as web browsers are more likely to try e-commerce for the first time now than any other time of the year,” Mulpuru says.
Forrester also predicts each consumer will spend 10% more on average online than they have in the past. “As consumers become more tenured web shoppers, they buy more in other categories and shift spend away from traditional channels like stores and catalogs to the web.”
Mobile spending will also increase this year. On key shopping dates in 2013, in particular Thanksgiving and Cyber Monday (the Monday after Thanksgiving), 34% and 38% of shoppers, respectively, said they used smartphones and tablets to shop. That was up from 21% and 23% in 2012. That trend will continue in 2014, Forrester predicts.
Despite the growth, there are challenges facing retailers this holiday shopping season, Mulpuru says. Just like last year, the holiday shopping season is shorter than average. There are 28 days between Thanksgiving and Christmas this year, whereas there were just 27 last year. “When there are fewer days between Thanksgiving and Christmas, shoppers have fewer days to complete their gift shopping and retailers see less revenue,” she writes.
That compressed shopping season will also lead to delivery challenges in December, as daily e-commerce package volume in the two weeks before Christmas can be seven times as high as daily package volume between the months of January to October.
But consumers still expect timely and free shipping, Mulpuru says. Last year during Thanksgiving weekend and Cyber Monday, 61% and 60% of online buyers, respectively, took advantage of free shipping offers. And 59% of U.S. online shoppers say they consider shipping costs when deciding whether to buy online, Forrester research has found.