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EcommerceBytes-NewsFlash, Number 2145 - October 26, 2009 - ISSN 1539-5065    5 of 4

PayPal Popular with Holiday Shoppers; Free Shipping, Social Media Also Hot

By Ina Steiner
EcommerceBytes.com
October 26, 2009




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Shop.org released data about online holiday shopping that shows PayPal is a popular method of payment for consumers. When asked, How will you pay for your online purchases this holiday season, 34 percent of consumers surveyed answered PayPal, compared to 5.5% for Checkout by Amazon and 1.8 for Google Checkout. Two-thirds of shoppers (67.3%) will use a credit card for some online purchases this holiday season, and one-third will also use a debit card (35.6%). In addition, 11.5 percent of shoppers plan to use a gift card or gift certificate to pay for holiday items online this year.

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 (meaning that a customer must purchase a certain item or a certain number of or dollar amount of merchandise before receiving the offer) 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.

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.

In addition to a strong focus on sales and free shipping, many online retailers have revamped their websites this holiday season to make it easier for people to shop. According to the survey, many retailers have added or revamped their sites' shopping cart (45.2%), search capabilities (44.3%), suggested items (42.9%), customer ratings and reviews (40.6%), and featured sale pages (37.1%).

Largely due to the convenience of the web, more than one-fourth of online shoppers (26.7%) said they plan to spend a larger portion of their holiday budget online this year. Reasons behind why people will spend more online range from the ability to shop at all hours of the day (41.9%) to shoppers feeling it is easier to compare prices (34.0%) to Americans' insatiable appetite for free shipping (33.1%). Others said they will spend more online because it's simply more convenient for them (32.4%), they don't want to fight crowds in stores (24.9%) or because it's easier to find items (16.7%).

The small percentage of people (5.7%) who plan to spend less of their holiday budget online said that they'll pull back due to expensive shipping charges (22.8%), because they like to see or handle items before they buy (12.5%) or because they prefer a store experience (10.8%). A fraction of shoppers said they hesitated to shop online due to concerns about security (1.1%), credit card theft (0.6%), privacy (0.1%) or concerns about retailers tracking online activity (0.1%).

About the Study
The eHoliday Study, now in its eighth year, provides an authoritative snapshot of the holiday activities of both large and small online retailers, many of which have been in business for at least ten years, and also includes the sentiments of online holiday shoppers. The Study, conducted by BIGresearch for Shop.org, surveyed 2,623 consumers from September 23 - October 6, 2009 and 70 online retailers from September 14 - October 6, 2009.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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