California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.

While many retail sales analysts forecast flat holiday sales, online sales are
expected to reach $44.7 billion, an 8 percent jump over last year, according
to Forrester Research. According to a recent survey of 4,000 online consumers,
94 percent have made a purchase online in the past three months and plan to
do the same for the holidays. As for retailers, 72 percent of those questioned
for the third-quarter Forrester report, "The State of Retailing Online," said
they expect holiday sales to increase over last year.

But to cope with the down economy, online stores will try to weigh customer
demand against the need to boost profits, according to the Forrester report
"US Online Holiday Retail Forecast, 2009". "Despite the lingering effects of
the recession, the online space remains the retail industry's growth engine,"
said Sucharita Mulpuru, Forrester Research vice president and principal analyst,
in a statement. "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." Retailers on the Web will offer sales and
discounts as always, but of a more limited time and quantity. Automatic free
shipping may be jettisoned in favor of free shipping only above certain price
levels, says Forrester. To drive business, online sellers may also take advantage
of new trends. More detailed product information will be available, as will
social networking tools that let customers share purchasing advice with friends
and family.

"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,"
said Mulpuru. "Online retailers will be ready for them with a special focus this
year on engagement and service."

A National Retail Federation statement announced, "According to Shop.org's
eHoliday Survey, conducted by BIGresearch, nearly nine in ten (87.1%) retailers
will have a special promotion for Cyber Monday, up from 83.7 percent last year
and 72.2 percent in 2007. The most popular promotions are expected to be
specific deals (42.9%), one-day sales (32.9%), and free shipping on all purchases
(15.7%)."

I am Tim Johnson and this has been the California Business Minute.