Holiday Online Spending Outlook Positive, Study Says

Oct 31, 2005 (02:10 PM EST)

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Consumers will spend 25 percent more online this holiday season with sales reaching $18 billion, as more get comfortable with logging on to the Web, according to a study released by Forrester Research Inc. on Monday.

Forrester Research said traditional items from consumer electronics to toys will prove popular, noting apparel will be popular because more women are shopping online.

About 2.5 million new households are expected to begin shopping online in 2005. That's slowing a bit from the 3.5 million new households that began shopping online in 2004.

While online spending is projected to be sizeable, it is still small compared with this year's 5 percent increase to $435.3 billion the National Retail Federation expects retailers will bring in between Thanksgiving and Christmas. "This holiday season most people want to receive clothing, DVDs and other media like video games, gift cards, toys and consumer electronics," said Ellen Davis, spokeswoman for the NRF.

Online sales are expected to improve this year at sports retailer Recreational Equipment Inc. Sales this year are up more than 20%. About 15% of REI's revenue comes from online sales. "Online sales are increasing, but we're also opening new stores that are doing very well," said Mike Foley, spokesman for REI. "The biggest factor for holiday sales at REI is the weather and how much snow we get. We won't know until December how things will shape up this year, but it's been exceptionally cold on the east coast it's expected to be a snowy winter in the northwest as well."