Holiday E-Tail Increases Share of Shoppers’ Dollars

On average, online shoppers plan to buy 47 percent of their holiday gifts offline at traditional retailers and 38 percent of their gifts on the Internet, according to a survey by PC Data and Goldman Sachs, which found catalogs will be the source of 15 percent of gifts. In 1999, online shoppers expected to buy nearly two-thirds 62 percent of their gifts at stores and only 25 percent online.

“Brick-and-mortar stores remain the preferred shopping venue during the holidays,” said Cameron Meierhoefer, Internet analyst for PC Data. “Yet slowly but surely, a migration toward Web shopping is occurring, especially for online consumers who look to the web as an opportunity to beat the holiday rush and avoid crowds they’ll find in stores.”

For those who chose the Web over stores, the top motivation to shop online is to avoid crowds 63.5 percent, according to the study. Fifty-two percent believe it is “easier to compare products and prices online,” while nearly 45 percent are attracted by “access to wider selection of products.” Thirty-four percent cited “lower item prices” as the prime reason for shopping online.

According to a survey by the Gartner Group, Inc., more than 40 percent of experienced online retail buyers will be doing at least some of their holiday shopping online this year. Among those buying gifts online, the Internet will account for 43 percent of their total holiday spending. People in the US who have a year or more experience in buying products and services online will spend $8.4 billion this year. Worldwide online holiday spending this year is projected to reach $19.5 billion.

“Internet retailers will be selling to a much more experienced online shopper this year,” said David Schehr, research director in Gartner’s E-Business Services Group. “This is both a positive and a negative for the more established online retailers. It’s a positive because online buyers tend to shop at sites with which they already have experience, so marketing efforts can be more effectively targeted. But expectations will also be higher, and it’s crucial that Internet retailers fulfill customer requests this holiday season, or they risk losing those customers forever.”

Gartner also found that consumers plan on purchasing the same online this year as they did last year (books, CDS, toys, videos, and computer software) with the exception of clothes and shoes, which was mentioned by only 8 percent of respondents this year after being in the top four last year.

Gartner’s survey was conducted among a sample of 2,704 Internet users.

Forrester Research researched the online gift market from a year-round perspective, not just the Q4 holidays. Forrester’s Technographics® report, “Pulling in Online Gift Buyers,” found that a Web retailer’s success or failure as a gift-buying destination depends on how well its presence and offering match what the 20 million online gift buyers expect when they search for gifts online.

Understanding which products resonate specifically with online gift buyers and how particular gift categories vary by occasion will help retailers push the right gifts at the right times. On average, gift buyers spend $68 per online purchase, and while products like clothing and books hover near the top of the popularity list for every occasion, gifts change with each event. For example, toys top the list for children’s occasions, books are top for adult birthdays, and flowers are most popular for Mother’s Day and Father’s Day.

“Having the right product mix is one thing, but it won’t do any good if the consumer doesn’t think of the site when going online to buy,” said Forrester analyst Christopher Kelley. “Consumers are demanding the perfect gift, at the right time, and hassle-free. In this competitive landscape, e-tailers must deliver on this promise or perish.”

The next step to luring online gift buyers is understanding when consumers go to the Web to purchase a present. Shoppers in the market for low-risk gifts, such as books or T-shirts, know exactly what they want and where they’ll buy it when shopping on the Web. However, consumers searching for big-ticket electronics will search on a couple of sites to comparison shop for the best price before making a purchase.

Forrester also found that the top priority for gift buyers is that their gift arrives on time. More than 80 percent of the gift buyers surveyed reported that online delivery is key. Nearly three-quarters (62 percent) of Web buyers said they saved time buying gifts online vs, going offline to a store. Since most buyers already know what they want and where they want to buy it by the time they go online, they can’t be bothered by bad search and product category guessing games.

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