A Very Festive Season for E-Tailers
Two years ago, when online customer service was uneven at best, it looked as though holiday shopping over the Internet was stalled on Santa's runway. Since then, e-tailers have made dramatic strides in making shopping more customer-friendly by improving everything from the ordering and payment processes to security, logistics, and returns.
The moves seem to have paid off for e-tailers in 2001, the retail sector's most difficult holiday shopping season in at least two decades. In contrast to the paltry 1% to 2% estimated sales growth at most traditional retailers during the eight-week holiday shopping season, online spending grew about 15% over the year-ago holiday period, according to a recent eSpending report.
"SILVER LIINING." The study, released by Goldman Sachs, Harris Interactive, and Nielsen//Netratings, says holiday purchases at e-tailers for 2001 reached some $13.8 billion, vs. $12 billion for 2000.
"Online holiday spending continued its growth, despite pressures from the slowing U.S. economy," says Lori Iventosch-James, director of e-commerce research at Harris Interactive. Adds Fred Crawford, senior vice-president of Cap Gemini Ernst&Young's global consumer products and retail sector: "Online was the silver lining in an otherwise pretty gray sky [for retailers] this holiday season."
While legitimate questions can be raised about the methodologies used to estimate online spending (see "E-Tailing's Statistical Black Hole"), according to an eSpending report based on a monthly survey of 36,000 Internet users, some 86% of online shoppers polled during the holiday season said they were satisfied with their e-shopping experiences. Of those surveyed, 24% said shopping on the Web was better this season than last year, citing a steady stream of special sales and free shipping offers.
GAINING STRENGTH. "E-tailers were well prepared and able to deliver a consistent or even improved level of service in 2001," claims Sean Kaldor, vice-president for analytical services at Netratings. In light of an economic slowdown that left consumers hesitant to spend because of the recession and job cuts, retail experts say the holiday findings are a positive in the online retail sector.
According to Nielsen//Netratings, nearly one-third of U.S. adults now shop online. "Internet shopping has arrived," says Crawford. And traffic to shopping sites continues to show gains. Jupiter Media Metrix found in a recent report that during the 2001 holiday season, traffic jumped 50% over the previous year and 95% vs. 1999.
"With the holiday-buying season behind us, we're left with one inescapable truth: The Internet has become an integral part of holiday shopping," says Charles Buchwalter, vice-president for media research at Jupiter Media Metrix. "Unlike 2000, when online shopping started strong but then fell off, online shopping this year started strong and ended even stronger."
CAN'T WAIT TIL CHRISTMAS. The dark cloud wrapped around this silver lining is that, for 2001 as a whole, online sales growth was down. Netratings' Kaldor estimates the rate slowed to 44% last year, down from 50% in 2000. Overall, he estimates 2001 online sales of $60 billion. Actual Internet sales, as reported by the retailers, have not yet been tallied.
Still, e-tailers are already wishing for a repeat performance under the Christmas tree in December, 2002. "The future of e-tailing will depend heavily upon how well merchants are able to maintain this consistent satisfaction level despite varying levels of spending growth and in the face of increasing demands for profit," says Kaldor. That's hardly something to ho-ho-ho about
The moves seem to have paid off for e-tailers in 2001, the retail sector's most difficult holiday shopping season in at least two decades. In contrast to the paltry 1% to 2% estimated sales growth at most traditional retailers during the eight-week holiday shopping season, online spending grew about 15% over the year-ago holiday period, according to a recent eSpending report.
"SILVER LIINING." The study, released by Goldman Sachs, Harris Interactive, and Nielsen//Netratings, says holiday purchases at e-tailers for 2001 reached some $13.8 billion, vs. $12 billion for 2000.
"Online holiday spending continued its growth, despite pressures from the slowing U.S. economy," says Lori Iventosch-James, director of e-commerce research at Harris Interactive. Adds Fred Crawford, senior vice-president of Cap Gemini Ernst&Young's global consumer products and retail sector: "Online was the silver lining in an otherwise pretty gray sky [for retailers] this holiday season."
While legitimate questions can be raised about the methodologies used to estimate online spending (see "E-Tailing's Statistical Black Hole"), according to an eSpending report based on a monthly survey of 36,000 Internet users, some 86% of online shoppers polled during the holiday season said they were satisfied with their e-shopping experiences. Of those surveyed, 24% said shopping on the Web was better this season than last year, citing a steady stream of special sales and free shipping offers.
GAINING STRENGTH. "E-tailers were well prepared and able to deliver a consistent or even improved level of service in 2001," claims Sean Kaldor, vice-president for analytical services at Netratings. In light of an economic slowdown that left consumers hesitant to spend because of the recession and job cuts, retail experts say the holiday findings are a positive in the online retail sector.
According to Nielsen//Netratings, nearly one-third of U.S. adults now shop online. "Internet shopping has arrived," says Crawford. And traffic to shopping sites continues to show gains. Jupiter Media Metrix found in a recent report that during the 2001 holiday season, traffic jumped 50% over the previous year and 95% vs. 1999.
"With the holiday-buying season behind us, we're left with one inescapable truth: The Internet has become an integral part of holiday shopping," says Charles Buchwalter, vice-president for media research at Jupiter Media Metrix. "Unlike 2000, when online shopping started strong but then fell off, online shopping this year started strong and ended even stronger."
CAN'T WAIT TIL CHRISTMAS. The dark cloud wrapped around this silver lining is that, for 2001 as a whole, online sales growth was down. Netratings' Kaldor estimates the rate slowed to 44% last year, down from 50% in 2000. Overall, he estimates 2001 online sales of $60 billion. Actual Internet sales, as reported by the retailers, have not yet been tallied.
Still, e-tailers are already wishing for a repeat performance under the Christmas tree in December, 2002. "The future of e-tailing will depend heavily upon how well merchants are able to maintain this consistent satisfaction level despite varying levels of spending growth and in the face of increasing demands for profit," says Kaldor. That's hardly something to ho-ho-ho about
