Holiday online sales up 76%; order size up 27%

[January 9th 2001]

Average order size during the 2000 online holiday shopping season grew 27 percent, up from an increase of only 8 percent during the 1999 holiday season. New research from Shop.org and The Boston Consulting Group also shows that revenues grew 76 percent over last year's holiday season, which combined with growth in the average order size, offers a favorable sign for online retailers.

"This increase in order size shows the growing trust consumers have in the online channel," said Elaine Rubin, Shop.org Chairman. "Higher average spend will allow online retailers to recover their customer acquisition costs - which in the third quarter had dipped down to $20 - sooner. It is also an indication that many of the holiday promotions such as free shipping with large orders proved successful."

These results come from a survey of 35 leading online retailers in major gift categories for the period November 18 to December 21. In a similar survey conducted during the 1999 holiday shopping season, sales grew 300 percent, while the average order size grew only 8 percent.

Shop.org/BCG's quarterly surveys have revealed a progressive improvement in online retailing performance, as competitive pressures intensified. Customer acquisition costs have decreased steadily from $45 in the first quarter of 2000 to $20 in the third. Revenue from repeat buyers has also been on the increase.

"Traditional retailers came on strong this holiday season," said James Vogtle, Director of E-Commerce Research at The Boston Consulting Group. "Many have used their off-line assets and know-how -- such as brand, product selection, vendor relationships and marketing expertise -- to create compelling online stores. This made them extremely well positioned to attract many of the 49 million consumers who were shopping for gifts online -- many of which were already customers of their brick-and-mortar operations."

Links
Shop.org		http://www.shop.org
Boston Consulting Group		http://www.bcg.com