Consumers Increasingly Embrace Online Shopping, 'Green' Shopping This Holiday Season

Seventy-one Percent of Consumers Will Purchase Online, Making it the #2
Shopping Destination; Almost Half Willing to Pay More for 'Green' Gifts,
Says Deloitte Annual Holiday Survey

Online retailing will continue to
grow this holiday season, with a record 71 percent of consumers spending at
least part of their holiday budgets on the Internet, according to
Deloitte's 23rd Annual Holiday Survey of retail spending and trends. This
figure is up five percentage points from 2004.

    This popular medium for holiday gift shopping ranked #2 this year,
behind discount department stores. More than one in five consumers (21
percent) surveyed plan to shop primarily or entirely online this holiday
season (up from 19 percent last year), and almost one-quarter (24 percent)
of total dollars are expected to be spent on the Internet, compared with 22
percent last year and only 19 percent in 2004.

    The survey shows that difficult economic conditions are a factor in the
Internet's continued growth. More than one-third (36 percent) of consumers
say they will shop more online and in catalogs this year in order to save
on gas. In addition, because of the economic environment, more than half
(52 percent) will be on the lookout for free shipping offers from online
retailers.

    Consumers are also looking for retailers to provide them with
flexibility this holiday season. Almost three-quarters of consumers (70
percent) surveyed will, for example, conduct online research in advance of
a store visit. Almost one in 10 (9 percent) say they'll use their mobile
phone to assist with online/in-store shopping; among 18-29 year olds, this
number rises to almost two in 10 (17 percent). These expectations are an
extension of existing shopper behaviors: over half of consumers (56
percent) say they have used multiple shopping channels over the past year,
most often purchasing a product in one channel (store, website, catalog)
after viewing or researching it on another channel.

    "Consumers want a seamless multichannel retail experience," said Stacy
Janiak, Deloitte's U.S. Retail leader. "They want the option of touching
and feeling a product in the store and then being able to order it at their
convenience, and they don't want to be told that a product purchased online
can't be returned to a local store. Particularly in this economic
environment, a positive cross-channel experience can help retailers gain
market share and differentiate their brands. Integrated channels also
benefit retailers by allowing them to rationalize merchandise selection in
their stores while fulfilling customer demand from an expanded online
inventory."

    Green Retailing Remains a Big -- and Growing -- Draw

    The survey also found that the "green" movement continues to build
momentum. More than four out of 10 consumers (44 percent) are willing to
pay extra for green gifts this holiday season. Of those, half say they are
willing to pay between 10 to 25 percent more, while the remaining half are
willing to pay 5 percent more.

    Additionally, almost four in 10 (38 percent) surveyed say they will use
fewer plastic bags from supermarkets and other stores this year -- a
significant increase over the 27 percent who said the same last year. One
in five consumers (20 percent) say they will purchase more "eco-friendly"
products this holiday season than they did in the past. A similar number
(21 percent) say they will consider not wrapping holiday gifts to conserve
paper.

    "The big question around the green movement has always been how it
translates into revenues for retailers," said Janiak. "Our survey shows
that a significant number of people will pay more for eco-friendly
products, which tells us that this issue is becoming a key factor in
consumers' purchasing decisions. Like multichannel retailing,
environmentally friendly strategies can help retailers differentiate their
brands, capture consumers' hearts and minds and increase share of wallet,
particularly in this economic environment."

    Clothing Continues to Be a Popular Gift; Nintendo's Wii Takes Top
Honors

    For the fifth year, clothing continued to be the second-most-popular
gift category in the survey (gift cards have been #1 for five years);
however, the popularity of clothing has fallen over the past several years.
CDs/DVDs for music and movies were again #3 and toys and games were #4.
Money and books were tied at #5.

    The top gifts that consumers said they intend to buy for friends and
family include Nintendo's Wii gaming system, Apple's iPod (which has been
in the top 3 since 2005), Sony's PlayStation and Microsoft Xbox. Other top
gifts included two computer games -- Wii Fit and Guitar Hero -- Apple's
iPhone, Barbie, American Girl and Hannah Montana merchandise. The top
"generic" gifts mentioned were televisions (HD, plasma, flat screen etc.),
computers/laptops, GPS systems and digital cameras. As previously
announced, the survey found that gift cards/certificates continued to be
the #1 gift that consumers plan to buy; the top venues for these gift cards
were Wal-Mart, Amazon and Target.

    About the Survey:

    The survey was commissioned by Deloitte and conducted online by an
independent research company between September 26 and October 7, 2008. The
survey polled a sample of 13,276 consumers and has a margin of error for
the entire sample of plus or minus one percentage point.

    For more information about Deloitte's Annual Holiday Survey, including
interesting statistics, historical data and useful links, please visit
http://www.deloitte.com/us/2008HolidaySurvey.