Jan. 10, 2008

Online marketing research firm comScore just released new numbers that reveal U.S. online spending during the 2007 holiday season (Nov. and Dec.) exceeded $29 billion, a 19.1 percent increase over 2006's holiday sales.

comScore said that “Green Monday” (Monday, Dec. 10, 2007) was the season’s heaviest spending day online, tallying up more than $881 million in online sales, an impressive 33 percent increase over the same day in 2006.

Overall, eCommerce spending was also heavy on other notable days such as Thanksgiving, Black Friday and Cyber Monday. For each of these days, year-on-year sales growth exceeded the 19 percent growth rate for the entire holiday season.

One simple explanation for this is that online consumers held back spending in early November in anticipation of some big promotions offered later in the holiday season.

Gian Fulgoni, Chairman of comScore said "the softness in the growth of online retail sales during the first ten days of November proved difficult to overcome, and in a way prevented the season’s growth rate from reaching our original forecast of 20 percent."

As a whole, comScore’s online holiday sales growth rate closely approximates eMarketer’s initial forecast of 18.5 percent, published last November.

While an 18.5 percent growth rate is still considered strong by most analysts, it's a noticeable drop from 2006’s 24.8 percent growth rate, and is the lowest online holiday sales growth rate since at least 2003.

Forrester Research and JupiterResearch also released pre-holiday season projections that online sales would increase by at least 20 percent. Much of those variations in sales and growth rates are due to different research methodologies.

Two reasons for forecasting a slower growth were a maturing online segment and a more difficult economic time for consumers, especially in the U.S.

Unlike eMarketer and Jupiter, both of which define the holiday season as November and December, Forrester considers the holiday season as Thanksgiving to Christmas, the period when online spending appears to have peaked.

Forecasts of total U.S. retail sales growth (the vast majority of which are store sales) for the 2007 holiday season paled in comparison with forecasts of online holiday sales.

The general consensus among leading research organizations was for sales growth in the 4 to 5 percent range.

Forrester’s forecast also included online auctions sales, which were excluded from eMarketer’s original estimate.

Source: eMarketer