E-Commerce Adds Joy to Holiday Retail Numbers

With Black Friday and Cyber Monday nearly two weeks away, it appears that ecommerce shoppers are not waiting. According to Chase Paymentech, a merchant acquirer and payment processor, its Cyber Holiday Pulse Index projects strong year-over-year growth, with online sales up over 25 percent. Average ticket value, however, appears to be continuing a downward trend for the fourth straight year, currently down over 9 percent. While the recession drove that trend for a couple seasons, last year the available data linked smaller tickets to the growing demand for digital media such as music and, more recently, eBooks.

The U.S. Department of Commerce estimated that online sales grew by over 17% in the first half of this year. As ecommerce continues to grow in importance as a retail channel, its significance during the critical holiday shopping season has also been steadily rising.

“Our Pulse data shows that many ecommerce merchants realize as much as 30-40% of annualized sales volumes during the last two months of the year," said Mike Duffy, president of Chase Paymentech. "With increased promotional activity, expanded markets for digital products, and the potential of mobile shopping, 2011 promises to be the most exciting holiday online shopping season yet.”

Sucharita Mulpuru, vice president and principal analyst at Forrester Research, added “Online sales growth continues to rise by strong double digits as the drivers of adoption and wallet shift remain the same: convenience, price, selection, and overall value." As a result, "Forrester expects to see 2011 U.S. online holiday sales grow 15% over 2010."

Black Friday, Cyber Monday, and Beyond

Pulse Index data has shown that Cyber Monday is not a myth – it has been the single largest shopping day of the year in recent years, but only by a slight margin. While Cyber Monday is important, the Pulse data has consistently demonstrated that online shopping activity continues to be very strong over the weeks that follow, and that merchants should be planning for near peak levels of demand throughout the season.

The Pulse Index also identified a trend indicating that more consumers are shopping earlier in the holiday season, even before Black Friday and Cyber Monday. Black Friday has been a brick and mortar phenomenon for years, but ecommerce may be changing the rules, allowing consumers to take advantage of deals before the stores open.

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