The Prospects Look Bright for Retail E-Commerce Sales

In my just published Online Holiday Shopping Preview report (available to eMarketer Total Access subscribers), I forecast that e-commerce holiday season sales will grow 5.4% over last year, reaching $30 billion. Although this is tepid growth compared with the double-digit rates seen for most of this decade, it is a strong improvement over last season’s 5.7% decline. It also compares favorably with retail experts’ predictions of flat holiday store sales.

My online holiday sales forecast incorporates last week’s US Census Bureau report showing that after three consecutive quarters of sales declines retail e-commerce sales turned a corner in Q3 2009 by growing 2.1%. I expect that the recovery will gain momentum in Q4, spurred by holiday spending in November and December.

E-commerce is ideally suited for holiday shopping. The convenience of 24-hour shopping, the ability to compare prices, the opportunity to avoid crowded malls and the ease of finding items that run out of stock in nearby stores are all reasons why holiday shoppers will buy online in greater numbers and shift a bigger share of their total gift spending to the Internet this holiday season.

I am optimistic about the future of e-commerce. Over the next couple of years, unleashed pent-up demand should push e-commerce sales growth back to pre-recession double-digit levels. Mobile commerce, which is on the verge of taking off, will add new vigor to e-commerce. Further on the horizon is the intriguing potential of distributed e-commerce. Retailers will no longer wait for customers to come to their Websites. Instead they will bring their virtual stores to the sites where consumers congregate.