Pundits Predict A Profitable Christmas Holiday Season For E-Commerce Retailers in 2009

Pundits Predict A Profitable Christmas Holiday Season For E-Commerce Retailers in 2009

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Have you been scratching your head and trying to figure out how to prepare for the upcoming holiday season? You know that you do not want to be overstocked and get stuck with a lot of inventory on your shelves.

You also do not want to miss the holiday spike if there is going to be one. It is generally a bit hard to know what will happen since the economy seems to be improving, that is, the financial sector has rebounded. But, unemployment is still high so it does not look as though the recovery has made it to your customers yet.

Well, industry analysts have been out and about looking at trends and indicators and the general thinking is that it’s going to be a better year but hardly a spectacular year.

The Wall Street Journal reported that:

‘Retailers will have a better holiday than last year, but sales will still be the second softest in more than forty years, according to one of the first studies issued for the Christmas buying season. These are the two worst years since the government began tracking retail sales forty two years ago. Holiday season sales will rise around two point five percent for mass merchants, a group that includes discount department stores like Wal Mart Stores Inc. (WMT) and warehouse clubs.’

MyBuys, the leading provider of personalized product recommendations (PPR) for retailers, has created the MyBuy’s E-Commerce Wellness Index to measure the overall health of U.S. e-commerce and track key trends among online merchants. The index shows that consumers are looking for deals. However, a key statistic to note is that overall health of the sector is up three percent. MyBuys expects Q4 2009 revenues and other key metrics to be much stronger this year.

The IMRG Capgemini eRetail Sales Index suggests that the picture is rosier for ecommerce, with shoppers spending GBP3.8 billion online in August 2009, an increase of more than GBP500 million on last year. The improvement in spending has exceeded their forecasts of twelve percent growth in the second half of this year.

Capgemini pointed out that the key drivers of this growth are clothing, accessories and electricals. MyBuy’s analysis of their results also discovered that when recommendations are placed above the fold, they are four times more likely to convert. In addition, having the star rating score as part of a recommendation motivates twenty six percent of shoppers to buy more. When applying personalization to email, online retailers are experiencing four times revenue per email when compared to batch and blast emails.

The message is that it is reasonable to be cautiously optimistic. Retailers should evaluate their respective marketplaces and plan accordingly.

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