Rising Tide Lifts E-Commerce Boats

An industry report says that more than 80 percent of online retailers saw revenue increases of at least 10 percent this holiday season and 31 percent saw increases of at least 50 percent.

And that comes despite the relatively dismal reports about holiday sales in real-world stores.

The figures are from the final installment of the Shop.org and BizRate.com 2002 Online Holiday Mood Study, which also found that an estimated 84 percent of shoppers said they were either somewhat satisfied or very satisfied with their online buying experience during the holidays.

The study found that email (78 percent), free shipping with conditions (62 percent) and search engine placement (37 percent) were the top three most successful marketing/promotion efforts for online merchants during the holidays.

Scott Silverman, executive director of Shop.org, called the online holiday season “a resounding success and a bright spot in retail.” Other studies, however, have said that the e-commerce industry got only a “C” grade despite record spending.

Meanwhile, Columbus, Ohio-based consulting and market research firm Retail Forward says the percentage of Internet users who shopped for gifts online continued to grow in the 2002 holiday season, hitting 88 percent. And perhaps more significantly, the proportion of those shoppers who became buyers grew as well – to 75 percent from 69 percent in 2001.

Nearly four in ten (37 percent) online holiday gift purchasers bought books, followed closely by clothing (35 percent) and toys (30 percent), Retail Forward says.

Research and analysis firm Jupiter Research (a unit of this site’s corporate parent) in New York City has said that online sales from Nov. 1 to Dec. 31 are expected to exceed its original forecast of $13.1 billion.

comScore Networks has reported that for one week alone, the holiday shopping week ending Dec. 20, online consumer sales totaled $1.9 billion, reflecting 19 percent growth versus the week before Christmas in 2001. However, just for the sake of perspective, keep in mind that online retailers still only account for 2.5 percent of the worldwide retail pie.

The Shop.org/BizRate study found that certain online efforts were especially valuable near the end of the holiday season. Clearance sale pages (46 percent), product promotion (44 percent), and featured sale item pages (42 percent) were the most valuable strategies in driving business, merchants polled said.

The study includes data from 60 Internet and multi-channel retailers – all members of the National Retail Federation’s Shop.org, an association for online retailers. Complementing the data collected from retailers are insights into the role that online shopping plays in consumers’ overall holiday purchasing. That data comes from BizRate.com’s panel of online buyers.

Additional information comes from a collaborative report between The Goldman Sachs Group, Harris Interactive, and Nielsen//NetRatings that reveals a 24 percent increase from 2001’s shopping season, translating to nearly $13.7 billion.

“With each holiday season e-commerce becomes more of a mainstream activity, attracting a greater mass audience,” said Lori Iventosch-James, director of e-commerce research, Harris Interactive.

The increase from the $11 billion spent in 2001 could be partially attributed to the big discounts from e-tailers, along with free shipping incentives, and the research found that consumers slated 16 percent of their holiday budgets for online shopping, compared to 14 percent in 2001.

Top Shopping Categories During the 2002 Holiday Season, Ranked by Spending, (11/2 – 12/27)
Category Category Spending Online
Percent Growth
2001 vs 2002
1. Books, Music, Video/DVD 3,113 40.0%
2. Apparel/Clothing 2,680 20.3%
3. Travel 1,971 5.8%
4. Consumer electronics 1,960 72.4%
5. Toys/Video games 1,843 72.5%
Source: Goldman Sachs, Harris Interactive, and Nielsen//NetRatings

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