The Numbers Are In

The latest study by The Boston Consulting Group (BCG) and Shop.org found the number of orders placed online during the holiday season grew 270 percent over last year, and online retailers saw a 300 percent increase in revenues over last year.

Shop.org and BCG collected data from leading online retailers in major gift categories for the period Nov. 20 to Dec. 19. Online retailers surveyed include those in apparel, books and music, home and garden, specialty foods, electronic goods, and related retailing categories, but did not include financial services and travel.

The results show that year-over-year revenue for the holiday season quadrupled, growing by 300 percent. The size of the average e-commerce order was up 8 percent over the average order placed during the same period last year.

“The tremendous surge in online retailing over the holiday season has exceeded expectations,” said BCG senior VP David Pecaut. “These growth figures clearly demonstrate that this year, consumers were much more comfortable doing their gift shopping online and were attracted by the range of seasonal offerings from online retailers. We expect this growth curve to carry over into next year.”

A nationwide survey of Internet shoppers by PeopleSupport.com, a provider of customer service for Web-based retailers, found that Internet shoppers bought an average of six gifts online this holiday season, with an average purchase price of $134 per gift.

Thirteen percent of these holiday shoppers spent more than $100 on a typical Internet holiday gift purchase, while 4 percent spent more than $500 on a typical gift item purchased on the Internet. Forty-one percent purchased gifts in the $26-$200 price range, with 33 percent spending in the $10-25 price range.

PeopleSupport’s survey was conducted among Internet users who had shopped online in the previous 12 months, and it also explored the problems experienced while shopping online.

  • 43 percent of online shoppers expressed concern about the willingness of online merchants to keep their financial and personal information secure and private
  • 40 percent of online shoppers said that one or more Internet retailers they patronized had run out of an item or had a disappointing selection
  • 33 percent of online shoppers had trouble accessing the online merchant or had other technical problems at the site
  • 22 percent of online shoppers had a problem with shipping or feel they were overcharged for shipping
  • 5 percent of online shoppers felt that the online merchant had lied or deceived them in some way

Enamics, a company that assists enterprises in becoming Internet players, found the failure rate of Internet commerce transactions reached record levels in 1999, with 25 percent of online shoppers abandoning attempts to buy via the Internet. Only 65 percent of orders handled by pure Internet companies were delivered correctly and on time, compared to 80 percent for companies grounded in the conventional retail arena.

Despite the issues that remain with online shopping, enamics found that US consumer e-commerce tripled in value in 1999 to surpass $11.9 billion, driven by strong online sales of $3.35 billion during the holiday season.

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