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to look like offline
With sales jump, price-cutting and poorer service
By Toni Fitzgerald
Yes, it was one nifty holiday selling season online, in contrast to the bricks and mortar season, which was by all accounts a disaster with sales up just 1.5 percent.
Online holiday sales were up 23 percent versus last year, according to BizRate. Even more impressive, online sales surged by 40 percent in fourth-quarter 2002, bringing the yearly e-commerce sales total to $47.98 billion, 34 percent more than last year.
But perhaps more significant, online shopping this holiday season began to look a lot like offline shopping.
More people shopped online this holiday season than ever but they spent less money. The average internet shopper spent just $131 per purchase this year, down $14 from 2001.
The bargain-hunting mentality that rules offline holiday shoppers has spread to the web, which should not be so surprising.
But so too has the annoyance factor. As consumers have grown to tolerate long lines at stores, they appear to have come to accept poor customer support from e-commerce sites.
Another interesting trend, revealed in a report by BizRate, is the growing role of all-in-one online retailers at the expense of specialty shops. The also mirrors a longstanding trend in offline retail.
BizRate found that the sites that saw big increases in traffic were destinations such as Microsoft’s MSN e-tailer network, with a 50 percent jump compared to last year, and Amazon.com, which expanded its offerings to include clothing this year, were not specialty sites.
The most popular holiday items – computer hardware, electronics and entertainment – were all available via such sites.
BizRate also found that while the number of online purchases in 2002 jumped by 37 percent, to 358.6 million, the purchase price per person dropped. During the post-Thanksgiving holiday shopping period, it fell by 10 percent.
BizRate also reports that 39 percent of online shoppers cited special free or discounted shipping deals as incentives to purchase. That makes sense in a year in which the average holiday shipping costs increased by more than 14 percent versus last season.
But perhaps the most interesting trend to emerge is the declining satisfaction levels of online shoppers -- after a period in which e-commerce retailers were working hard to improve service.
A study commissioned by ForeSee Results found that online customer service ratings actually dipped compared to last year. More shoppers went online but fewer reported outstanding service. Only 59 percent reported being highly satisfied with their experience.
Ten percent of those polled by ForeSee said they were highly unsatisfied with their online shopping experience.
Nonetheless, 71 percent said that they would likely use the internet to do holiday shopping again next year.
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Online sales |
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Quarter |
2001 |
2002 |
% change |
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Q1 |
$8.22 |
$10.08 |
23% |
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Q2 |
$7.91 |
$10.45 |
32% |
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Q3 |
$7.32 |
$10.02 |
37% |
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Q4 |
$12.43 |
$17.44 |
40% |
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Holiday* |
$6.43 |
$7.92 |
23% |
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Source: BizRate. * Holiday period is measured from November 25-December 25, 2002. Holiday period is included in fourth quarter data. |
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Average purchase price |
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Quarter |
2001 |
2002 |
% |
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Q1 |
$119 |
$127 |
6% |
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Q2 |
$127 |
$126 |
-1% |
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Q3 |
$161 |
$145 |
-10% |
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Q4 |
$146 |
$137 |
-6% |
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Holiday* |
$145 |
$131 |
-10% |
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Full Year |
$137 |
$134 |
-2% |
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Source: BizRate. * Holiday period is measured from November 25-December 25, 2002. Holiday period is included in fourth quarter data. |
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January 6, 2003© 2003 Media Life
-Toni Fitzgerald is a staff writer for Media Life.
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