Predictions About Online Transactions This Holiday Season: Ho-hum Or Happy?
The holidays are supposed to be a time of joy and good cheer. But for many businesses it is also a time for anxiety as they wonder if sales will meet their expectations. No doubt about it, the holiday shopping season is critical to the success of most retailers. More than 30 percent report holiday purchases make up between 30-50 percent of their annual sales, and almost 60 percent note between 20-30 percent of their annual sales occur during the holiday season, according to a recently released survey conducted by Internet Retailer.
For online retailers, the highest traffic day occurs on “Cyber Monday” (a term coined by Shop.org), the first Monday after Thanksgiving. But the highest online sales day won't come until Dec. 4, according to Web analytics company Coremetrics Inc.
Thanks to improved online purchasing experiences, growing consumer acceptance of Internet-based transactions (75 percent of U.S. online households have purchased products online, according to Forrester Research) and the need for convenience, retailers enjoyed more sales via their Internet presence last year. In 2005, holiday store sales rose by less than six percent, while online shopping growth increased 25 percent. But is this trend slowing? According to Jupiter Research, 114 million users will buy online during the 2006 holiday season; and while that is a record number, it is also a mere six percent increase over the 2005 season.
Other research paints a different picture. The 21st Deloitte Annual Holiday Survey predicts robust growth for e-tailers. “Convenience and time pressures, among other factors, continue to push shoppers to the Internet, with 70 percent of consumers surveyed expecting to do part of their holiday spending online. Coremetrics predicts that online retail sales will be up 16 percent over last year's holiday season.
The Internet continues to gain traction even among lower income households: 57 percent of consumers with household incomes under $50,000 plan to do some of their holiday shopping online.
Interestingly, the Deloitte research also reveals that more Americans are changing their attitude about credit card use and plan to use other payment methods: 63 percent of total holiday purchases will be paid for using cash, checks or debit cards, and 38 percent of individual consumers surveyed say they will not use credit cards at all for holiday shopping.
Despite this shift in consumer behavior, does this point to growth in ACH WEB transactions? The answer remains to be seen. Internet Retailer's research found that only 10 percent of retailers plan on adding to or expanding their payment options, which could mean that consumers may not have as many opportunities to buy online using ACH versus credit or debit cards.
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