On-line Sales Expected to Grow 20%

Cambridge, Mass., On-line holiday retail sales will increase by 20% over 2003, to $13.2 billion, according to Forrester Research. The increase represents a decrease in year-over-year growth. In comparison, last year's growth over 2002 was 31%.

The Forrester report, "Online Holiday Sales 2004: Proceed With Caution," points to the mainstreaming of on-line shopping and retailers' efforts to boost in-store sales during the 2004 holiday season as the main reasons for the decrease in year-over-year growth.

"As on-line shopping becomes more mainstream, on-line growth will begin to mimic lukewarm off-line sales. And, because stores are the channel most at risk of missing sales forecasts this year, retailers will scale back on-line promotions, such as free shipping, and will promote large in-store discounts as a way to drive customers to stores," says Forrester Research senior analyst, Carrie A. Johnson. "As a result, the benefits of in-store shopping may outweigh the convenience of shopping on line this year."

Forrester defines the holiday season as the period between Thanksgiving and Christmas.