Forrester Expecting Online Holiday Sales to Increase 8%

While overall retail sales are expected to remain flat or down slightly this holiday shopping season, Forrester Research predicts online retail sales in the U.S. will reach $44.7 billion. That’s an 8% increase over the 2008 holiday shopping season.

Forrester defines the holiday shopping season as the months of November and December.

“Despite the lingering effects of the recession, the online space remains the retail industry’s growth engine,” Sucharita Mulpuru, vice president/principal analyst for Forrester Research, said in a release. “What’s different this holiday from past years is that online retailers will manage to the bottom line, which will change some of the tactics they have employed in the past.”

According to the new Forrester report, “U.S. Online Holiday Retail Forecast, 2009,” online retailers will strive to balance consumer demand this holiday with profitability. Retailers will cut down on automatic free shipping and institute price thresholds to qualify for free shipping, the report says.

Customer engagement is also a priority this holiday: Expect to see online retailers deploy more cross-channel customer service options and advanced merchandising software. This technology will provide more product information and enhanced social networking tools that will enable consumers to share purchase decisions with friends.

“Tighter offline inventories may benefit the online channel as consumers go to the Web looking for products — and prices — they can’t find in stores this holiday,” Mulpuru said. “Online retailers will be ready for them with a special focus this year on engagement and service.”

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