Paradigm Shift: Retails 70%-22% Lead over Web Changes to 44%-49%

e-Marketer came out with their Holiday Sales Forecast and although I'm aware and have posted many times about the impending shift from retail stores to the net, I was still taken aback by the graph on the left.  Take a look at the DRAMATIC shift from last year to this year.  It's paradigm in nature.

Last year 70% (as a percent of spending) of Internet Users shopped at Retail Stores compared to 22% who shopped online.

This year, that 70% number has dropped to 44% and Internet Shopping has gone from 22% to 49%. 

So here's the shift:  Last year Internet loses 70% - 22% but in one year the Internet takes the lead 49% - 44%.  Wow...

HomeATM looks like it is well positioned to take advantage of this fortuitous "changing of the guard" if you will.  Retail consumers are running to the other side, credit card usage is declining, while debit card usage is growing and PIN debit is the last remaining vestibule for online payments. 

I love the coincidence that PIN debit is also known as "online" debit.  Looks like everybody is getting online this Holiday season and our "gift" to Internet Retailers is the ability to make consumers cards "present" 

I also love the irony of the fact that HomeATM plans on making "Card Not Present" Internet Transactions a "Thing of the Past"!  I love this game!

Online Holiday Sales Forecast - eMarketer

OCTOBER 22, 2008
Jeffrey Grau, Senior Analyst

This year online holiday sales (excluding travel) will total $32.1 billion, up 10.1% over 2007. This is a sharp decline from growth rates in the low-to-mid 20% range seen over the past few years.

The weak economy is placing downward pressure on e-commerce sales this season. That pressure accentuates the already declining sales growth, which is a sign of the inevitable maturation of the online shopping channel.

US Retail E-Commerce Holiday Season Sales, 2003-2008 (billions and % change)

Financially strapped consumers will use a variety of strategies to save money on holiday gifts. More than ever, they will turn to the Internet to get gift ideas, find bargains and locate retailers that stock desired products. Shoppers will shift a larger share of their purchases from stores to the Internet to save gas money and avail themselves of retailers’ free shipping offers.

The main engine of e-commerce growth is incumbent online buyers who are shifting a greater percentage of their total spending from stores to the Internet.

The spending shift from stores to Websites is expected to continue this holiday season, according to a recent survey sponsored by ATG and conducted by the e-tailing group. This year 49% of holiday gift spending among US Internet users will occur online, compared with 44% in stores—making this the first time the Web has surpassed the store as the preferred channel for Internet users to purchase holiday gifts.

Leading Channels Used for Holiday Shopping According to US Internet Users, 2007 & 2008 (% of spending)