decision factory

Online Holiday Sales Catch Up… But Margins Will Suffer

Deep discounts and free shipping promotions have sparked a catch up in holiday online sales, as exhibited in the chart below. However, remember this holiday season is one week shorter than last year, so holiday sales might well end up coming short overall.

Consumers have been very receptive and sensitive to price – as expected by retailers. For instance, email promotions and comparison shopping have seen quite a boost in effectively driving sales leads to online retailers.

Online retailers have been very aggressive on pricing, which will inevitably drag down margins. The slide show below shows very vividly the messaging focus on price this year, as opposed to last year’s variety of differentiation strategies.