E-Commerce Will Get Boost from Fourth Quarter

With the big fourth quarter holiday season still to come, Datamonitor and BizRate.com predict that 2001 can still be a decent year for e-commerce.

According to Datamonitor’s IMPACT 2001 interactive consumer survey, U.S. e-commerce revenue will hit $38.7 billion in 2001, but look for an increasing number of transactions to involve either the Web site of an offline brand or an offline purchase that research or influenced online.

“Many e-businesses have concentrated on duplicating bricks and mortar business models in cyberspace — virtual bricks and mortar — and they have proven to be highly competitive in retaining their customers, especially where real bricks and mortar are easily accessible,” said Elizabeth Kennedy, technology analyst with Datamonitor.

Datamonitor’s research found the potential for such hybrid transactions is 10 times that for pure e-commerce, which makes the $38.7 billion identified in this research, just the tip of the e-commerce iceberg.

BizRate.com predicts that online sales will increase by 34 percent in the fourth quarter of 2001, with $12.4 billion in sales, a healthy growth rate vs. the hyper growth rate seen in prior years.

Women Shopping Online
At Holiday Season
Percent of
Women Online
1998 39%
1999 49%
2000 55%
Source: BizRate.com

E-commerce “winners” will comprise companies that adapt to shifts in online consumer behavior. BizRate identifies what it sees as the winning formula for e-holiday success this season: Women will be powering online shopping; exceptional customer service is key to winning consumers’ business; and companies must utilize multichannel touch-points to rise above the holiday clutter.

“This is the year when online shopping goes mass — with more than 25 percent of Americans shopping online,” said BizRate.com President and CEO Chuck Davis. “In a maturing market, e-tailers need to focus on the consumer, especially female buyers, in order to continue to thrive.”

Catering to the online shopping needs of women will become even more important this year. Since the 2000 holiday season, women have become the majority buyers at key gift-giving occasions, and they are expected to continue to power online growth during this year’s holiday season. More than half of the retail categories such as Gifts & Flowers, Health & Beauty, Food & Drink and Home & Garden are female-dominated and continue to grow twice as fast as other categories.

“E-tailers and manufacturers operating within these female growth categories need to give serious thought to how they will reach out to women,” Davis said.

Customer service has been a primary concern of online shoppers from day one, and BizRate has found a strong correlation between good customer service and increased transactional volume — and vice versa. Three out of five barriers to repeat purchase intent are all customer-service related: late delivery, poor customer support and no/poor order tracking.

Echoing Datamonitor’s findings concerning multiple channels, BizRate.com found that more touch-points equate to increased spending and first-time shoppers are more likely to be influenced by a cross-channel presence.

“Even in the midst of a softening economy, e-commerce is where the real consumer growth is occurring, which is good news for the industry at large,” Davis said.

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