Merry News for Online Retailers

By SmallBusinessComputing Staff | Posted December 10, 2001
While the economic outlook isn't exactly rosy these days, retailers shouldn't panic this holiday season. Several analysts are predicting a strong holiday sales season - especially if you happen to sell on line.

A report by Nielsen/NetRatings and Harris Interactive shows that 106 million people will shop on line in December and will spend a record $9.9 billion during the holiday season - an increase of $3 billion from last year. Jupiter Media Metrix is predicting an 11 percent increase in online spending during the months of November and December compared to last year, with $11.9 billion in sales. Forty-six million people are expected to shop on line during these months, up from 36 million the year before, according to Jupiter.

Sales on the day after Thanksgiving are always closely monitored by analysts to gauge holiday sales levels, and this year online commerce appeared to be doing quite well. Nielsen/NetRatings reported 22 percent more home Internet users doing online holiday shopping compared to the daily weekday average. Amazon.com reported at one point Friday that it was selling 12,000 more items per hour than at the same point last year.

Despite more consumers purchasing on line, brick-and-mortar retailers shouldn't be left out in the cold this season. Early reports showed that stores were packed with shoppers over the Thanksgiving weekend. In a survey of check purchases at 27,000 locations nationwide, TeleCheck reported that Friday-after-Thanksgiving sales were 2.4 percent higher than last year. However, it also reported that the average purchase by check was $73.64, 4.6 percent less than last year.

While TeleCheck's reports may mean that individual consumers are spending less, a study by The Boston Consulting Group (BCG) and Harris Interactive finds that large numbers of consumers are entering the holiday season with a "confident" frame of mind. 37 percent of the 4,546 adults surveyed said they were "confident," while 15 percent described themselves as "distressed." The remaining 48 percent of those surveyed said they were "recovering."

In addition, the study found that 56 percent of those surveyed plan to spend the same or more on gifts this holiday season, while 68 percent of consumers who plan to purchase gifts on line intend to spend more of their holiday-gift budget on line (27 percent) than last year (22 percent).

The BCG/Harris study also found that "multi-channel" retailers have an advantage over retailers with just a brick-and-mortar store or just a Web site. Among those consumers who described themselves as "recovering," 80 percent of prospective clothing buyers who visited both a Sears store and the Sears Web site said they planned to make a purchase at Sears. On the other hand, 61 percent who visited only a Sears store and 63 percent who visited only the Sears Web site said they would make a purchase at Sears. The study also estimates that consumers who research a gift on a company's Web site will purchase that gift from another company's store or Web site 35 percent of the time.

-- William Gillis

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