ComScore predicts holiday shoppers will spend 20% more online than last year, but Nielsen forecasts flat online spending.

Antone Gonsalves, Contributor

November 21, 2007

2 Min Read

Research firm ComScore predicts holiday shoppers will spend 20% more online than last year, but another research firm isn't so sure.

ComScore on Tuesday released the first in a series of twice weekly holiday season e-commerce updates, saying that the first 18 days of the holiday season saw more than $7 billion in online retail spending, a 17% increase from the same period a year ago.

Sales in the first week of November were up modestly from a year ago, but surged to levels in excess of 20% by mid-November, ComScore Chairman Gian Fulgoni said in a statement. "It's likely that warmer than average weather at the beginning of November kept people outdoors and away from their computers, weighing down early holiday season sales, especially for key online categories like apparel."

ComScore, which defines the holiday season as the months of November and December, said sales during the second and third weeks of November are likely to be better indicators of how the remainder of the season will play out. The researcher also released its official forecast for holiday spending, projecting that online shoppers would spend 20% more than last year, or $29.5 billion.

Research firm Nielsen, however, was less optimistic. In a survey of nearly 1,000 shoppers, the company found that their online spending would compose about the same share of their total holiday budgets as in 2006. The largest group, 35%, said they would spend between 25% and 50% of their shopping budget online. A third expected to spend less than 25%.

"The fact that consumers expect to allocate the same share of what may be a shrinking overall holiday budget to the Web, suggests that online sales growth may not live up to the 20% annual growth rates we have seen in years past," Ken Cassar, VP of industry solutions analytics for Nielsen Online, said in a statement.

The Nielsen survey also found that convenience, not price, was the primary appeal for shopping online. More than eight in 10 respondents said the ability to shop anytime in the day was why they chose online shopping. Saving time was the next most popular reason, followed by comparison shopping and finding things easily.

Only 46% listed low prices as a reason to shop online, and even fewer respondents, 24%, cited low shipping costs.

For the 10 months leading up to the holiday season, shoppers spent $93.6 billion online, a 21% increase over last year, ComScore said.

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