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The holiday season is make or break for the rest of the year. Starting with the Friday following Thanksgiving, otherwise known as Black Friday, most retailers finally come into profitability. This year could be a whole new ballgame, however, as millions of Americans sit unemployed and unable to spend as much this year as they had in years prior.

eTail Revolution

Traditionally, internet retailers have seen strong growth in the fourth quarter. Though many Americans exempt themselves from online purchases during the first three quarters, the endless search for deals to stretch the “holiday Dollar” brings ordinary shoppers to bargain basement online retailers. This year could be the best one yet for online retailers, despite a recession.

What Makes Internet Retailing Different

Online retailers are low cost, high cash flow operations. Compared to their brick and mortar counterparts, online retailers have practically no expenses other than the processes to move their inventory from the warehouse to the shipping processing department. Some online stores don’t even have to hold the product, instead they “drop ship” or send an order to the product manufacturer for direct delivery to the purchaser which saves on retail space and human resources. Due to their massive cost cutting, online retailers can sell items with a fraction of the margin of offline sellers and still yield hefty profits.

10% Growth in eShoppers

A recent survey found that 55% of respondents intended to make holiday purchases online compared to 49% last year. 26% of respondents will use the internet to shop for gifts, again up from last year’s number of 21%. The online market is growing, providing smart online retailers with the opportunity to draw more money out of more pockets, unlike brick and mortar’s which will have to draw more money out of the same number of pockets. This year could set a precedent for online shopping. If gifts are received on time and the prices are right, online retailers could become a huge segment of the holiday season. (and sport huge profits, too)

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