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Yu Jeffrey Hu, associate professor of iinformation technology management

Professor Explains Growing Role of E-Commerce in Holiday Shopping

As consumers shop for the holidays,  e-commerce will continue to play a key role, says Yu Jeffrey Hu, associate professor of information technology management at Georgia Tech's Scheller College of Business.  Blurred boundaries between online and offline shopping will give consumers more choices, more savings, and better shopping experience, he adds.

"E-commerce already accounted for 15 percent of consumers' holiday spending in 2011, according to online consultancy Forrester Research," said Hu. "This holiday shopping season, Forrester forecasts that e-commerce will grow by about 15 percent compared with last year, while the National Retail Federation predicts the overall retail sales will grow by only 4.1 percent. U.S. consumers are increasingly turning to the online channel when they shop for the holidays. "

Hu's earlier research suggests that Internet retailers very much compete with brick-and-mortar retailers for consumers' shopping dollars: consumers who live in areas with fewer local stores tend to purchase more products from online stores, and vice versa.

"More interestingly, Internet retailers have unique capabilities of stocking more niche products, a.k.a. 'long tail' products and have online search and recommendation tools that help consumers discover and purchase such niche products. Therefore, the competition between Internet retailers and offline retailers is more muted for niche products."

Hu's ongoing research shows how the boundaries between online and offline shopping have become increasingly blurred. More and more consumers are using their smartphones when visiting stores. Armed with shopping apps, one scan of a product's barcode can pull up the prices of the same product at online stores.

"Consumers can simply use the stores as showrooms and order from whoever has the lowest price," says Hu. "This holiday shopping season, brick-and-mortar stores are trying to bring extended online product selection and online reviews to consumers via their apps and in-store tablet devices, while online retailers are working hard to provide 'almost' instant gratification via shortened delivery times and to enable consumers to use stores as showrooms. We predict that such intensified competitions between online and offline stores will give consumers, particularly those who are knowledgeable and technology-savvy, more choices, more savings and better shopping experiences."

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