eChristmas Greeting: Three Times The Traffic
Online holiday shopping traffic will almost triple last year's numbers, according to survey by Ernst & Young. The firm's survey of 1,200 Internet shoppers also projects a sizable uptick in how much they'll buy. Those using the Internet for at least half of their shopping will increase by a factor of five.
Last year, less than a quarter of surveyed shoppers did at least 10% of their holiday buying online. This year's share is projected at 67%, according to the firm's third annual Online Retailing Report. In 1998, only 4% of online shoppers did at least half of their holiday shopping online; this year's number is expected to reach 19%. Meanwhile, the number of Internet users with no plans to shop online during the holidays dropped dramatically, from 49% to 11%.
"Given this data, and considering the dramatic increase in the number of Internet sites and merchandise available, we are making some bullish predictions about 1999 online shopping figures," says Stephanie Shern, global vice chairman of retail and consumer products for Ernst & Young. The firm projects that online holiday sales will fall between $12 billion to $15 billion. Total revenue for calendar year 1999 will reach $25 million to $30 billion, the firm says.
Of this year's online shoppers:
- 59% are women, continuing a growing trend of women purchasing online;
- 58% are married;
- 58% are age 30-49; 23% are over 50; and 19% are 18-29;
- 58% are from the are middle income bracket, earning $30,000-$69,000;
- Buyers with children outweigh buyers without, 61% vs. 53%.
"E-tailers are not just selling to early adopters anymore÷they're selling to consumers who are more like the general population," says Tom Reynolds, the firm's national director of consulting services for retail & consumer products. "Just like brick-and-mortar stores, e-tailers have to build relationships with their customers. This relationship starts with marketing, but it develops through customer relationships and truly effective merchandising."
Top categories for online buyers are unchanged from 1998, with favorites being computers and related products, books, CDs, toys, and videos. Among the favorite sites sites: Amazon.com, Barnesandnoble.com, CDnow, buy.com and eToys.
Time constraints and frustration with in-store shopping are driving shoppers to the Web for holiday shopping this year, the survey reveals. Price was not a driving factor, nor were value-added services. When asked why they like to do their holiday shopping online, respondents say it's because:
- Web shopping saves time (64%)
- Stores and malls are too crowded (56%)
- The Web has more convenient shopping hours (52%)
- Online shopping means less driving (37%)
- Web merchandise costs less (16%)
- They can shop earlier in the season (14%)
- Sites offer one click shopping (12%)
- There's no sales tax (12%)
- The Internet offers better selection (11%)
- ˇand better availability (9%)
- They can shop later in season (4%)
- Retailers handle gift wrapping and shipping (3%)
Among top turnoffs for Web shoppers last year:
- High shipping costs (51%)
- High prices (45%)
- Need to try on for fit (38%)
- Not appropriate for large items (36%)
- Not appropriate for luxury items (26%)
- Want to see/feel item (23%)
"Winners for this holiday season will be those retailers who can integrate their 'brick-and-mortar' facilities with an Internet presence to deliver value and a seamless shopping experience to the online shopper," says Shern. "Online service must be exceptional at all levels÷from product selection and merchandising, to fast responsiveness to customer inquiries, to fulfillment and on-time delivery."
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