Target and Toys R Us posted overall sales declines during the holidays.
Online retailers are already gearing up for a very happy holiday season, with worldwide electronic commerce this holiday season projected to surpass $12.2 billion, according to Dataquest Inc., a unit of Gartner Group, Inc.. In 1998, online shopping reached $4.5 billion. The United States will dominate online holiday shopping with 70% of revenue. Europe is projected to account for 15.5% of revenue, while Asia/Pacific is forecast to have 7% of consumer electronic commerce this holiday season.
"While 1998 was the year that online shopping first rose to prominence in the United States, the 1999 holiday season is shaping up to be the launching point for an explosion of global consumer e-commerce," says Blaine Mathieu, senior industry analyst for Dataquest's e-Commerce Worldwide program. "The mainstream is primed: extensive publicity of consumer e-commerce has significantly raised awareness of online shopping. Increased growth in PCs online and free Internet accounts will greatly increase the total available market of holiday shoppers, particularly outside the United States."
Dataquest analysts said new technologies will help ignite purchases on the Internet. More specific targeting initiatives to consumers will also spur revenue this year.
"The development of digital wallet and shopping agent technologies has intensified in anticipation of the holiday shopping season, making it even easier for shoppers to quickly locate and purchase desired items. Such technologies are finally being distributed widely to consumers by large financial institutions and credit card issuers," Mathieu says. "Enough data has been gathered for marketers to truly begin engaging in the kind of targeted, one-to-one marketing that the Internet promises."
Another key to the success for Internet companies will be the lessons they learned from problems that occurred last year. "Reformed by the breakdown of numerous logistical and distribution systems in 1998, most e-tailers have learned to scale their infrastructure to be able to handle the upcoming flood of online sales. This year, significant hiring and large expenditures on new infrastructure will better help companies meet consumer demand," Mathieu says.
The 1999 holiday shopping season is expected to be a major event for business-to-consumer electronic commerce. "Outside of North America, this promises to be the first big online season," Mathieu says. "Within the U.S., many mainstream consumers will be making their first purchases online. In both cases, the future course of consumer e-commerce will be shaped by January, setting the stage for an incredible year 2000."