More consumers will be shopping online this holiday season, according to research firm ComScore. In a webcast Wednesday, the company forecast that online spending will grow three times faster than overall retail spending and twice as fast as last year.
From January to September, online retail spending already has increased 8% from the same period last year, with third-quarter spending up 9% from a year ago, according to ComScore, which predicts online sales this holiday season will grow 7% to 9% from the 2010 holiday season. Meanwhile, the firm expects overall retail spending for the holiday season will grow only 2% to 3% from last year.
Retailers with an online presence will take market share from brick-and-mortar-only stores during the fourth quarter as more shoppers use the Internet to get lower prices and, in some cases, avoid sales taxes. September visits to comparison-shopping sites jumped 24% from a year earlier, according to ComScore.
Meanwhile, the largest 25 online retailers are taking a bigger chunk of that online spending, accounting for 70% of the third quarter's online dollars, up from about 65% a year earlier.
"Consumers are really working hard to root out deals for better prices," ComScore Chairman Gian Fulgoni said during the Webcast, adding that signs of an economic upturn won't change frugal spending habits. "Even if consumers have the spending power, these attitudes will translate into a hesitancy to spend."
Consumer Spending On the Rise
There are some signs the economy is helping boost shopping, however. Gross domestic product grew 2% during the third quarter, in line with economists' expectations, while consumer spending increased at a 2.6% annual pace in the quarter -- its fastest pace since the fourth quarter of 2006. Additionally, the economy picked up about 150,000 jobs in October.
Still, with unemployment not budging from its 9.6% rate, consumer confidence heading into the holiday season largely depends on their specific economic standing. In a ComScore survey, about three quarters of respondents in households with combined annual incomes of less than $100,000 said they would spend less, while about half of those in wealthier households said they'd do the same. Unsurprisingly, the company also found that affluent consumers are more optimistic about the prospects of the U.S. economy than those with less money.But both the haves and the have nots are more likely to shop online. In the third quarter, Amazon.com (AMZN) said it attracted 36% more visitors than a year earlier, which helped it boost its profit 16% on a 39% jump in sales. DVD-rental service Netflix (NFLX) doubled its visitors, according to ComScore.Books & magazines, computer hardware and software, and consumer electronics were the fastest growing online categories, while online sales fell in furniture, sports and fitness.