Holiday Online Shopping Sales To Reach $11.9 B.

Jupiter Media Metrix reports that 2001 holiday online retail and travel sales will reach approximately $11.9 billion—an 11 percent increase over last year’s $10.8 billion. Although growth this season will be slower than last, Jupiter analysts expect to see more people shopping online (46 million in 2001, up from 36 million in 2000) and consumers allocating a greater percentage of their holiday budget to online shopping.

“As traditional retailers brace for a holiday shopping season fraught with uncertainty, online retailers are facing quite the opposite- the first fairly predictable holiday season,” said Ken Cassar, Jupiter senior analyst. “The attacks of September 11 will in fact have a net zero impact on online retailers. Because fewer Americans will travel via air this year, and those that do will be less likely to carry armloads of packages through tight airport security, there’s an increased likelihood that consumers will buy from online and catalog retailers. However, any benefits that this creates will be offset by the negative economic impact of the attacks.”

An October 2001 Jupiter Consumer Survey reveals that only 14 percent of those that plan to buy gifts online this season believe they will spend less than 10 percent of their budget online, compared with 18 percent in 2000 and 61 percent in 1999. According to Jupiter analysts, online holiday budget allocation is increasing at the same time that spending per person is decreasing because the online population is less affluent this year and because holiday budgets are shrinking as a result of the weakened economic environment.

There will be more women shopping online than men this holiday season, accounting for 53 percent of the total online holiday buying population. While the average holiday spending per male will be higher due to purchases in larger price categories such as consumer electronics and PCs, women will spend more as a group for the first time. Jupiter analysts caution that while this is an important benchmark for retailers, it does not necessarily suggest any short-term shift in strategy because the factors that drive women to buy online are very similar to those that bring men to buy online.
Despite changes in the merchant landscape, consumers will buy from the same gift categories this season as last. According to the recent survey, top products that consumers have already bought or plan to buy online this season include books (40 percent), clothing and shoes (30 percent), toys (29 percent), videos (20 percent) and music (28 percent). The category with the largest projected drop this year compared with last year is computers and computer accessories. Last year, 24 percent of consumers said they would buy computers or computer accessories online—this year that figure is only 18 percent. Jupiter analysts attribute the finding to the weakened computer sector exacerbated by the recession and an increasingly mass-market online buyer who is less interested in technology.

“The slowdown in online retail sales growth this holiday season is actually a blessing in disguise. For the first time, online holiday sales will be somewhat predictable. In order to capitalize, online retailers must appropriately scale their businesses to balance high consumers’ expectations with their own need to show a profit,” Cassar said.

For more information at http://www.jmm.com.