Increase in Online Sales Expected This Holiday, Survey Says

November 7th, 2011 by Mary Lou Byrd

Retailers may get a bit of cheer this holiday season: more revenue from online sales. A survey by Shop.org shows that 68% of retailers expect online sales to grow at least 15% or more over last year’s holiday season. That survey is in line with another survey by the National Retail Federation that found the average shopper is planning to do approximately 36% of his or her shopping online this season, up from 32.7% last year. Increased online sales, if they come to fruition, will be positive for many retailers whose stock prices are tied to internet orders such as Gap Inc. (NYSE:GPS), American Eagle Outfitters (NYSE:AEO), Urban Outfitters (NASDAQ: URBN) and Aeropostale (NYSE:ARO).

See Full Trefis Analysis for Gap Inc.


Gap, Others Could Benefit Significantly

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Gap Inc. (NYSE: GPS) may get some respite from slumping domestic and international sales, as Trefis estimates that almost a quarter of  its value is from internet orders and franchise businesses.

Retailers can reap the benefits from increased online sales. Trefis estimates that American Eagle’s internet and catalog orders account for nearly 28% of its stock price and Urban Outfitters’ orders constitute 30% of its stock price, compared to about 15% for Aeropostale.

Promotions Key to Making the Sale

As all online retailers vie for internet orders, promotions will play a key role in whether they make the sale or not. Shop.org’s survey showed that consumers favor free shipping offers, and most retailers plan on giving them what they want. Nine in 10 retailers are planning to offer free shipping and say they have even budgeted higher this year than last for this promotion. They also plan to offer free shipping earlier this year.

Earlier Start to Holiday Promotions

Earlier holiday marketing this year is also expected, with more than half surveyed planning on beginning their promotions by late October. Another 37.2% surveyed said they plan on starting their holiday marketing by mid-November.

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