Holiday eShopping To Top $12 Billion

Tue. October 3, 2000 12:00 AM by Newstream

New York, NY - American consumers will spend $12.5 billion online during this year's fourth quarter holiday season, a 71% increase from 1999's holiday total of $7.3 billion, according to eMarketer. Total annual United States consumer e-commerce revenues are projected to rise to $37 billion by year-end 2000.

"A 71% boost over last year is certainly respectable, but we are done seeing growth rates in the 100% - 200% range," says eMarketer Statsmaster, Geoffrey Ramsey.

During the fourth quarter, 5.8 million Internet users will make their very first purchase over the web. As a group, these new buyers will represent 13% of the nearly 45 million online buyers in fourth quarter.

On average, e-consumers will spend $280 online, or a little over one-fifth of their total holiday spending. In contrast, the average online expenditure during fourth quarter 1999 was only $215. Experienced buyers will drive the average expenditure up, while "newbies" will push it down.

"These newbies will be enticed to buy online for the convenience advantages of the web - like not having to deal with crowds, traffic and long lines," added Ramsey. "Also, there's a lot of pressure not to be the last person in America to purchase over the web!"

In addition, eMarketer reports that experienced buyers will come back to the web in droves, and most will increase their spending. Despite the hiccups in service and delivery problems reported last year, 78% of holiday shoppers in 1999 were generally satisfied with their online buying experiences. But even those who experienced horror stories -- and vowed never again to return to the offending site -- did not give up on the web altogether.

According to Ramsey, comparing $12.5 billion in online sales with anticipated total retail sales of $858 billion for the quarter, yields a paltry share of 1.5%. "Clearly, the web has a long way to go before it captures a significant portion of the total retail pie," says Ramsey.

In the coming quarter, eMarketer expects service online will improve significantly over last year (in 1999, eMarketer gave e-merchants an overall grade of B-). "Remembering last year, e-retailers are determined to avoid making the same mistakes as they prepare for this holiday shopping season". The biggest problems last year were, in order of customer frustration level:
· Out-of-stock merchandise
· Late (or no) delivery
· Poor website performance and navigation
· Outrageous or disguised shipping rates

"eMerchants are learning from companies like Amazon and the top multi-channel sellers how to use tools that keep customers informed and happy, rather than employing technology for technology's sake," stated Ramsey.

News, photos provided by Newstream

 

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