Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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Further on the shipping front, the e-tailing group found that online retailers on average were charging 14% more for delivery this year over last. The average charge for standard delivery was $5.40 vs. $4.73 last year. “But we found a lot of retailers who had outrageously high shipping charges-$7, $8 even $9,” Freedman says.
By the end of the Christmas shopping season, 58% of consumers had actually bought a holiday gift online, up from 47% a year earlier, reported the Consumer Business Practice of Deloitte & Touche LLP in the fourth of its annual year-end survey of consumers’ online and offline shopping. And 2% of consumers had completed all their Christmas shopping online. Yet another group had shopped online but not bought, indicating that Internet retailing has integrated itself into the shopping routine of mainstream America. That’s good news for e-retailers, but it also means that any more growth will have to come from selling more to the mainstream-and that means the pressure to perform will be on. “I take that growth as a sign that the web is approaching channel maturity,” says Carl Steidtman, chief economist of Deloitte Research. “We are approaching the point where it will be difficult to add to those numbers.”
“Internet growth is slowing,” says Lori Iventosch-James, director of e-commerce research at Harris Interactive. “Growth in users is going to have to come from people who are not comfortable now using the Internet.”
At least acquiring those new customers should become less expensive, says yet another survey of online retailers. Customer acquisition costs fell 40% from the third quarter of 2000 to the third quarter of 2001, reports the Shop.org/Boston Consulting Group’s The State of Online Retailing report. Acquiring each customer cost $20 in Q3 2000 and $12 in Q3 2001, says the report. Keeping customers fell, too; retention cost per customer was $9 in Q3 2000 and $5 in Q3 2001.
|Online retail spending
in the Fourth Quarter
|Week ending:||(in millions)|
|Source: comScore Networks Inc. Average baseline week: $589 million.|
|*the weeks of 12/16, 23 and 30 are Internet Retailer estimates|