Online Holiday Sales Likely to Increase Again

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A Purdue University retail expert expects online shopping this holiday season to increase 10 to 15 percent over last year. Richard Feinberg says up to one-quarter of those sales will come from mobile devices.

November 6, 2014

News Release

West Lafayette, Ind. -- Online holiday sales are expected to be 10 percent to 15 percent higher than last year, says Richard Feinberg, a Purdue University professor of retail management.

Feinberg says retail sales are expected to exceed $70 billion in November and December.

Online sales likely will account for 10 percent of all retail holiday spending, up from 9 percent in 2013 and 8 percent in 2012, he says.

While online sales continue to grow, that growth is slowing, Feinberg says.

"Much of the online sales increases the last five years have been fueled by a growth in the number of online shoppers, not how much they spent," he says. "The growth in new shoppers is slowing. So online retailers are faced with having to lure shoppers from other online competitors and enticing shoppers to spend more."

Some other observations from Feinberg on online holiday sales include:

* From 20 percent to 25 percent of online sales will come from mobile devices.

"Tablets are particularly significant for mobile sales growth, accounting for some 70 percent of all mobile-based sales," he says. "It is still difficult for most consumers to transact on their smartphone. This should change dramatically over the next two years as smartphone screen sizes get larger and retailers learn how to improve mobile sales sites."

* More retailers will offer free shipping.

"Consumers expect free shipping," Feinberg says. "They recommend online stores with free shipping to their friends."

* Price continues to be a dominant factor in online sales.

"Purdue research shows that the majority of online shoppers use price to make buying decisions," Feinberg says. "It's just too easy to compare prices for similar products on the Internet."

* Consumers read and trust online reviews.

"Our research shows that more than half of all consumers – and even more of those under 35 – do online research before buying," Feinberg says. "The reviews can determine where they buy and what they buy."

Source: Purdue University