WASHINGTON D.C., October 25, 2009—The economy is not only impacting shoppers, it’s affecting online retailers, too. According to results of Shop.org’s eHoliday Study, conducted by BIGresearch, shoppers will see changes in retail marketing and promotions this holiday season in response to economic uncertainty.
With an understanding that many of today’s shoppers use Facebook and Twitter regularly, and because these tools are more cost-effective than traditional advertising, 47.1 percent of retailers surveyed will be increasing their use of social media this holiday season.
More than half of retailers said they have added or improved their Facebook page (60.3%) and Twitter pages (58.7%) this year, while two-thirds (65.6%) have added or enhanced blogs and RSS feeds. In addition, to provide consumers with an extra incentive to start shopping, one-third of retailers (34.3%) say they will offer holiday deals earlier this year.
As another sign of the times, free shipping offers will abound this holiday season. Four out of five online retailers (79.4%) will offer free shipping with conditions at some point during the holiday season, while more than half (57.4%) also plan to offer free shipping without conditions.
More than one-third (35.7%) said their budgets for free shipping are higher than last year, and nearly as many (30.0%) said free shipping offers will start earlier than a year ago
“Retailers know that times are tough so they have created promotions and incentives to help Americans save money this holiday season,” said Scott Silverman, Executive Director of Shop.org. “From free shipping to Facebook, online retailers are combining new initiatives with tried-and-true tactics to make their companies stand out.”
Online retailers are also compensating for the economy by making operational changes to help them protect their profits. According to the survey, 41.4 percent of retailers have scaled back on inventory levels and 22.9 percent have hired fewer people in their stores.
While online growth is expected to slow this holiday season, it remains a bright spot in retail. According to the survey, 45.8 percent of online retailers expect their holiday sales to increase at least 15 percent over last year, while one-third (33.9%) expect sales to grow up to 14 percent. As a testament to the economy and the maturity of online retail, just one in five online retailers (20.3%) expects sales to be flat or decline.