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Holiday spending forecast

Posted by Michael Bloch in ecommerce (Saturday September 20, 2008 )

Whew, what a week on the financial markets. I’m not a stock market “playa”, I despise it, but I spent a lot of time during the last 7 days trying to understand what caused such turmoil and what it means for the months ahead; particularly in relation to ecommerce.

I’m still by no means an economics or Wall Street whiz after my crash course – but if you’re as confused as I am about what happened, this article on Time explains it all in plain English. It seems these financial high flyers aren’t much better than the guy that spends his family’s grocery money at the track. It’s a world of smoke and mirrors.

Anyhow, it’s a fluid situation and the show’s not over yet, but according to TNS Retail Forward, holiday sales this year will be the weakest in 17 years with only 1.5% growth.

.. but, that’s overall.

TNS projects online sales across retail channels will grow 9% this holiday season compared with 19% in 2007. Not great, but not bad either. As I’ve said in the past, at some stage the double digit growth figures will stop and it won’t mean the sky is falling… and I’d still much rather have my feet in ecommerce than bricks and mortar based business at the moment.

TNS believes the big box stores will do OK this year as people will be increasingly looking to stretch their dollars. Homegoods, furniture and home furnishings are expected to see drops, but consumer electronics spending should see moderate growth; particularly given the upcoming switchover to digital TV.

So this year, think “value-focused” – i.e. people will be bargain hunting. The events of the last week (and year for that matter) are sure to have some impact on the amount of cash folks have floating around for holiday spending; even among the more affluent.


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