Number of heavy online shoppers to increase nearly 300 percent this holiday season

[November 13th 2000]

Jupiter Research estimates that 6.3 million US residents will spend the majority (more than 50 percent) of their holiday budget online this year--an increase of 294 percent from 1999 when only 1.6 million spent the majority of their budget shopping online. In addition, Media Metrix has revealed a 12-month audience measurement trend showing that the proportion of visitors to shopping sites throughout 2000 already resembles the holiday season of 1999. Media Metrix's 12-month audience ratings trend indicates that nearly the same proportion of online users visited retail sites in August 2000 as did in December 1999, 74.9 percent and 73.3 percent, respectively.

Jupiter Research estimates that a total of 35 million people in the US will purchase gifts online this holiday season, versus 20 million who shopped online last year. This increase in consumers' online spending contributes to the overall rise in dollars spent online this season, $11.6 billion in December 2000 up from $7.0 billion during the same period last year, according to Jupiter Research.

Media Metrix reports that computer retail sites had the largest number of unique visitors (23.1 million) and were the "stickiest" category of shopping sites in December 1999, with users spending an average of 21.7 minutes; books and toys were the second most popular category last year. This holiday season, Jupiter Research predicts that books, toys, and music will remain among the top products that consumers purchase online, but a surprisingly large number of shoppers will purchase online clothing or shoes--items they traditionally prefer to seen, touch or try on.

"Consumers are likely to purchase clothing and shoes online this holiday season because they are both desirable gifts, and this year, a greater number of sites are offering a large selection of brand-name apparel," said Jupiter Research senior analyst, Ken Cassar.

"While online shoppers are price-conscious, they will primarily be driven by the need to save time and avoid crowds this holiday season," added Cassar. "Merchants must not discount themselves out of business, particularly when other factors can motivate consumers. This year, many merchants are planning to offer free or discounted shipping, free gifts with purchase, and other discounts as promotions, but implementing such promotions could turn into a costly mistake. Merchants must balance consumers' desire for promotions and discounts while keeping an eye on their bottom line."

According to Jupiter analysts, most online holiday shoppers (79 percent) plan to spend at least 10 percent of their total 2000 holiday budget online; 18 percent expect to spend over 50 percent of their holiday shopping dollars on the Internet this season, according to Jupiter analysts. Last year, however, according to Media Metrix, more visitors went to online-only retailers as opposed to brick-and-mortar retailers with Web sites (55 percent and 45 percent, respectively, among the top 100 retail destinations in December 2000).

"This year, Jupiter Research predicts that online retailers with brick-and-mortar origins will dominate in terms of number of visitors and, most important, in terms of transactions," concluded Cassar.

"The 1999 holiday season was the unofficial debut for many online retailers, and the fact that almost three of four Web users visited a retail site last December indicates a widespread eagerness to use the Internet as an alternative to on-site holiday gift shopping," said Anne Rickert, measurement analyst, Media Metrix.

Links
Jupiter Research		http://www.jup.com