Toys, Music Still Lead the E-Tail Parade

The holiday buying spree by home Internet users continues, with spending reaching more than $900 million at online retail sites during the week of Dec. 3-7, a 60 percent increase from the previous week, according to Goldman Sachs and PC Data.

Toys and music continue to lead the way, with toy sites capturing the No. 1 position with 1.3 million unique buyers, followed by music sites with more than 1 million unique buyers, according to the weekly survey. Online spending rose significantly in every category for the second week in a row. The number of buyers increased as well, with software (92 percent increase) and health and beauty (91 percent) showing the biggest leaps.

“Last week, one in ten home Internet users went to the Web to buy consumer goods, most of them gifts,” said Cameron Meierhoefer, Internet analyst for PC Data Online. “Toys and music expectedly dominated this past week’s online sales, but this holiday spree is driving record numbers of online shoppers into all categories, such as pet supply sites where spending increased from $7 million to $23 million in a week.”

Most Internet users shop online because of its convenience (52.7 percent), wide selection (13.1 percent) and to compare prices (12.7 percent). On the other hand, shoppers who prefer the mall do so because they want to take immediate possession of an item (25.8 percent) or to actually see or feel it (28.9 percent) the study found.

The Robertson Stephens Online Shopping Challenge, which relies on first-hand online shopper feedback, found that 8.3 percent of the 1,600 respondents during its seventh week, indicated they would be unlikely to shop at a Web site again.

“We believe this indicates a lower tolerance for merchants that do not meet expectations,” said Robertson Stephens senior eTailing Analyst Lauren Cooks Levitan. “With repeat shoppers outpacing first-time Internet shoppers by a ratio of almost 16:1 during week seven, it becomes even more important for e-tailers to provide a satisfying first-time customer experience to encourage repeat purchase tendencies and capture repeat business.”

The Robertson Stephens survey also found that 40.9 percent of its respondents reported using coupons during the week, versus 26.3 percent during the initial weeks of the survey. According to Levitan, this indicates that competitive pricing continues to be one of the most effective tools for driving traffic.

Top Categories Among Internet Shoppers, Dec. 3-7, 1999
Category Estimated Buyers
(000)
Buy Rate Est. Amount Spent
(000)
Percent Gifts
Toys 1,389 11.9% $158,855 90.4%
Music 1,053 9.3% $41,611 47.9%
Computer Software 1,047 14.8% $65,374 30.9%
Books 1,042 12.0% $42,585 55.6%
Videos/DVD 740 7.7% $21,529 59.1%
Apparel 592 6.5% $47,691 55.7%
Health & Beauty 524 24.4% $20,054 24.5%
Computer Hardware 518 19.2% $208,382 26.9%
Pet Supplies 387 16.9% $23,317 32.4%
Electronics 319 17.1% $60,265 59.0%
Flowers/Cards 296 11.0% $10,784 86.2%
Food/Groceries 256 12.5% $106,034 34.0%
Travel 250 12.5% $106,034 34.0%
Home & Garden 188 6.3% $14,663 57.9%
Sporting Goods 176 3.9% $20,637 59.0%
Entertainment 102 15.2% $14,255 31.8%
Autos 74 9.9% $10,887 40.0%
Total $904,801
Source: PC Data/Goldman Sachs

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