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BizReport : Ecommerce archives : November 02, 2010

Reports: Q3 ecommerce growth steady, Q4 forecast strong

Despite a fairly steady growth rate, industry experts are cautioning online retailers to be wary this holiday season. Why? Because even though consumers are spending more online, they are still leery of over-spending and are still holding on to their savings plans, most of which were set up during the recent recession. Not a bad thing at all, but with consumers still pinching pennies it makes sense for retailers to continue to watch their spending as well.

by Kristina Knight

For Q1 2010 consumers spent just under $34 billion (a 10% increase year to year), but in Q2 spending decreased to $32.9 billion, remaining fairly steady through Q3. Both Q2 and Q3 spending showed a 9% YoY increase.

"[Growth] in the third quarter remained solid at 9%, a fairly positive indicator for the upcoming holiday season," said Gian Fulgoni, comScore Chairman. "However, we continue to preach caution due to the continuation of high unemployment which is creating very divergent spending patterns between the 'haves' and the 'have nots'." He went on to say that although things seem economically better for the majority of Americans, many miss their pre-recession 'wealth' and are not spending to capacity as they once did.

Where are most consumers still spending? Books and Magazines continue to lead the online retail environment, along with Computers/Peripherals and Computers/Software, an indicator that home electronics/entertainment is a high priority for many shoppers.

Which brings us to eMarketers forecast for Q4 and the 2010 holiday shopping season. Experts predict that online shopping will increase by 13% for Q4 to reach about $51 billion. If that happens, consumers would spend over $10 billion more in the online space than in 2009. It could also push yearly ecommerce totals to more than $162 billion, a 12% increase over 2009. Holiday sales figures are expected to account for about 23% of the total yearly online spending, according to eMarketer's report.

Why the strong increases for Q4? Jeffrey Grau, Principal Analyst with eMarketer notes that shoppers are spending more online in an effort to avoid crowds in physical stores. Also, finding bargains is simpler online and making purchases of unique or popular items online can be simplified in an online environment.

"Cost conscious consumers also see online shopping as a way to spend wisely," writes Grau in an upcoming report. "They can go to coupon sites and shopping blogs and communities to learn about bargains. They can also research purchases to find cheaper alternatives."

Tags: 2010 holiday forecast, comScore, ecommerce, eMarketer, holiday spending, online shopping, Q4 2010 forecast

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