Online Spending Up Sharply Over Last Year

Consumers are either spending more money this holiday season or they're spending more of it online. For the first 32 days of the holiday shopping season, consumers spent $18.7 billion online, up 15 percent from the same period a year ago, according to comScore, a digital commerce research firm.

Last week, which began with Cyber Monday, had three days that recorded more than $1 billion each in online sales, including Cyber Monday, which began the heaviest online spending day on record, with $1.25 billion in sales.

"Cyber Monday kicked the week off with a bang as consumers opened their wallets to the tune of $1.25 billion, but it was only the beginning of a very strong week of online holiday spending," said comScore chairman Gian Fulgoni. "Tuesday and Wednesday followed with billion dollar spending days, helping Cyber Week reach a record weekly total of nearly $6 billion in spending.

"As the deals from this week expire, it will be important to see the degree to which consumers return to the same retailers to continue their holiday shopping, thereby helping improve retailers' profit margins, or if we experience a pullback in consumer spending – which has occurred in previous years – before promotional offers and spending intensity pick back up in earnest around mid-December," Fulgoni said.

Are consumers back?

Economists have been waiting for consumers to resume their spending habits as a means to help produce more economic growth. The comScore data can either be seen as a good sign, or an indication of future trouble.

That's because another report – this one from credit card processor First Data – finds that consumers are using their credit cards again. According to First Data, credit purchases were up in every quarter of 2011 so far, with preliminary data suggesting it will also rise in the current quarter.

According to First Data, credit card purchases on Black Friday were up 7.4 percent over last year while debit card purchases rose only 3.4 percent. Consumers burying themselves in holiday debt would be a bad thing, but if they plan to pay off those balances when the bill arrives, it could signal new confidence.

Spending online

Consumers are being drawn to online purchases, according to comScore, by a number of incentives, including free shipping.

"Free shipping is one of the most important incentives that online retailers must provide during the holiday season to ensure that shoppers will convert into buyers," Fulgoni said. "Consumers have come to expect free shipping during the holiday promotion periods, and retailers, in turn, have realized that they must offer this incentive if they want to maximize their share of consumer spending – especially at the outset of the shopping season.”

In fact, more than three-quarters of consumers say that free shipping is important to them when making an online purchase, and nearly half say they will abandon their shopping cart at checkout if they find free shipping is not being offered, according to comScore.