Holiday E-commerce Spending to Greatly Outpace Brick & Mortar (SCOR, AMZN, WMT, TGT)

Many stores are planning to open early on Black Friday in an effort to get a jump on holiday shopping, but spending increases are not expected to rise more than 3% or so. In contrast, on-line, e-commerce spending could rise by as much as 15%.

That’s the report from comScore, Inc. (NASDAQ: SCOR), based on e-commerce sales for the first two weeks of November. Consumers have spent $9.7 billion on-line through November 16th, an increase of 14% over the $8.5 billion they spent last year. That’s probably really good news for the three leading on-line e-commerce sites: Amazon.com (NASDAQ: AMZN), Wal-Mart Stores Inc. (NYSE: WMT), and Target Corp. (NYSE: TGT). comScore forecasts total 2011 holiday e-commerce sales at $37.6 billion, up 15% from $32.6 billion for the 2010 holiday season.

The following chart from comScore shows sales for the past four years and the first three weeks of this year.

Consumers continue to look for bargains, and what matters most for on-line sales during the holiday season is free shipping. More than 75% of on-line shoppers say free shipping is either very important or somewhat important to their purchasing decisions. In 2010, according to comScore, 49% of purchases made in the fourth quarter of the year included free shipping.

Amazon, Walmart, and Target can all afford to offer free shipping throughout the entire holiday shopping season, where smaller retailers may offer it on a piecemeal basis as they try to bump up sales during a promotional period.

E-commerce and web-based product research continues to play a bigger role in consumer spending. As smartphones and tablets continue to penetrate the consumer market, the impact of e-commerce should continue to grow.

Paul Ausick