Forecasts call for a jollier holiday shopping season online

[image]

Come this time of year, a growing number of shoppers scorn stores and do most of their holiday gift-buying on the Web. Forrester Research, a Massachusetts-based consulting firm, forecasts 11 percent of Americans will do at least three-quarters of their holiday shopping online.

Kathleen Kane of St. Louis Park is among those committed cyber-shoppers. With her laptop at her fingertips, she can shop just about anywhere whenever she wants.

"It certainly saves me a lot of time," she says. "It opens up a whole lot of other choices. Choices that might or might not be available to me in the stores I might normally visit. This way I certainly have access to most of the United States if not the world, in terms of what I can buy."

Kane sees little pleasure in store shopping this time of year. She dreads the traffic, the parking, the cold and the crowds.

"I really don't care too much for shopping in stores, particularly during the holiday season. Just feels way too stressful. It's way too crowded." Most of us still do the majority of our shopping in stores, though. It's estimated the Internet accounts for just six percent of overall retail sales annually. But analysts expect that figure could more than double before long.

Big drivers include the spread of high-speed Internet services, free shipping and the ability to return online purchases to nearby stores. More than 50 million U.S. households now have fast Internet connections and many of us have speedy connections at work, too.

"There's still quite a bit of room for growth," says Forrester Research analyst Sucharita Mulpuru. "It could be up to 15 percent of the total retail pie."

There's nothing people aren't buying online

"Every category is growing," says Mulpuru. "There's nothing people aren't buying online and if they're not it's usually because of some industry regulation -- drugs or pharmaceuticals. Virtually every major consumer spending category is penetrated in a pretty significant way online."

Mulpuru forecosts online retails sales will hit $33 billion this year, up from $27 billion last year. Mulpuru also notes the Internet influences hundreds of billions of dollars of in-store purchases, as shoppers go online to scope out what's on sale, research products and compare prices.

Retailers will surely appreciate the sales kick from the Internet. But overall they seem to be expecting their total sales, from stores and the Internet, to be disappointing, as worried consumers keep a tight hold on their wallets.

Minneapolis-based Target, for instance, posted a surprising drop in quarterly earnings this week. The retailing giant was hurt by weak sales of higher-profit items such as clothes and home goods. For the crucial holiday fourth quarter, Target said it expects quite modest earning growth.

But there's lots of holiday cheer at Target.com.

"We're forecasting to have the biggest holiday we've ever had at Target.com," says Target.com president Dale Nitschke.

Target doesn't disclose its online sales figures. But Nitschke expects Target.com could eventually directly account for five percent of the retailer's total sales. And it could provide a bigger kick for in-store sales.

Target's Web site already drives a tremendous number of store sales. More than 1 million shoppers a week already go to Target.com to scope out Target's weekly ad for in-store sales. And the stores direct shoppers to Target.com, where they find a much greater selection of products. A Target store typically carries about 65,000 items. Target.com features about 1.2 million, when you count books, music and movies.

Nitschke says Target even uses the Web to give shoppers sneak previews of what Target is considering selling in stores, months in advance.

"We work with the Target merchants on their business strategy and enable them to test products in advance of hitting the store," he says. "It enables our store merchants to see how things are selling and affect their ongoing buys. It's kind of a testing platform for Target stores."

But what what many shoppers still want in the age of the Internet are things they say can't find online, such as -- fun. Folks like Heather Mathews find fun at places like the Rosedale Mall.

I like getting out, being with the people, I like the decorations.

"I like getting out, being with the people, I like the decorations," she says.

But you won't see Mathews and her husband at the malls on Black Friday.

"We won't be out shopping the day after Thanksgiving," she vows. "Absolutely not."

And when Mathews does hit the stores, you may not see her husband, Brian, with her. He says he'll likely do most of his shopping online, when stores aren't open.

Shoppers eager to see what's on sale in stores this holiday season have been able to get sneak peeks on the Internet. Several Web sites comb the Internet for scanned images of retailers' weekly newspaper circulars and compile them for shoppers who want advance looks at them.

The circulars are printed weeks in advance and usually aren't closely guarded. One of the Web sites that collect the ads is tgiblackfriday.com Kevin Kahn of tgiblackfriday says the site also provides a searchable database of sale items, allowing shoppers to quickly compare prices.

"Once we find them (the ads) online we break them apart and enter them all in so users can search the Black Friday ads by category, store and find the most popular products," he says. "We did actually have a couple of them as early as a month ago."

Kahn says most retailers have not objected to the Internet previews of their ads. Kahn says up 40,000 shoppers have been viewing ads on his firm's Web site.

Gallery

Fullscreen SlidePrevious Slide

1 of 2

2 of 2

Next Slide