U.S. online consumer sales surge to $53 billion in 2001

[January 25th 2002]

comScore Networks has announced the results of the first complete review of consumer e-commerce for the year 2001, reporting that sales at domestic online retailers surged to $53 billion for the year. Excluding online Travel, comScore reports sales totaled $33.7 billion, reflecting a growth rate of approximately 20% vs. the year 2000.

While in some ways the trend in online sales mirrored that seen in total retail, there were some notable exceptions. Signs of mid-year softness in non-Travel sales were offset by what was - at the time - a strong period of growth in the online Travel sector.

Annual Overview: Total Industry

Following September 11 (and the American Airlines crash of November 12), and as the holidays approached, the Travel sector entered a slump from which it has not yet recovered; at the same time, the Internet became a channel of choice for consumers who sought to defend their quality of life and their budgets with the convenience and price comparison benefits that the Internet offers.

Table 1: Online Consumer Sales at U.S. Sites (excluding Auctions) 
      
($ millions)  1Q01        2Q01       3Q01       4Q01       FY01
Total        $11,482     $12,477    $13,300    $15,807    $53,066
Non-Travel   $7,755      $7,585     $7,565     $10,804    $33,709
Travel       $3,727      $4,892     $5,735     $5,003     $19,357

"In July and August, online Travel sales reached a fever pitch, fueled by consumer comfort with buying online, deep price discounts, and new choices in online agencies," noted Dan Hess, comScore vice president. "But after September 11th, the sector's sales fell dramatically, before beginning a slow recovery. However, comScore data for the first two weeks of January 2002 show a strong resurgence in online travel spending. Needless to say, we'll be closely watching the category going forward."

Table 2: Percent of Year 2001 Online Consumer Dollar Sales by Month
(excluding Auctions) 
      
% of FY
2001 Sales   Jan  Feb  Mar  Apr  May  Jun  Jul  Aug  Sep  Oct  Nov  Dec
TOTAL         7%   7%   8%   7%   8%   8%   9%   9%   7%   8%  10%  12%
Non-
Travel        7%   8%   8%   7%   8%   8%   8%   8%   7%   8%  10%  14%

Travel        6%   7%   6%   7%   9%   9%  11%  11%   7%   9%   9%   8%

Noteworthy Days Of 2001

As the Internet came into its own as a vibrant shopping venue, comScore's analysis highlighted key dates and statistics of interest throughout the year.

The highest sales day of the year was Wednesday, December 12th - the height of the holiday season - which posted $321.6 million for the day. The lowest sales day of the year was January 1st. "Online sales on weekend days are generally lower than on weekdays (when many shoppers are able to use the high speed Internet connections at their place of work) - and three-day weekends generally extend that same pattern," explained Mr. Hess.

The strongest weekend of the year also occurred during the holidays: December 15-16 rang up $341.1 million in sales a level 132% greater than the average weekend. Not surprisingly, the lowest weekend sales were posted over September 15-16, as the wake of the September 11th tragedies was felt in every corner of society and industry.

The average weekend day brings $97 million in sales, but average weekday (Monday-Friday) is a full 60% greater at $155 million, due to increased shopping activity at work-based PCs.

Leading Online Categories

comScore data show that at its third quarter peak, Travel accounted for over 40% of online sales; however, it finished the fourth quarter with the same 32% share at which it opened the year. Computer Hardware and Consumer Electronics were the hot products of the holidays; together these categories started the year at 19% of total sales and ended 2001 accounting for 24%.

"The trends we've seen in Travel, Computers and Consumer Electronics are consistent with more recent reports of overall strength in these sectors at retail," said Gian Fulgoni, comScore chairman and co-founder, "though the trends were clear in comScore's online shopping data several weeks before any retail measures were available."

Table 3: Share of Total Online Sales by Category 

Category        Q1 2001    Q2 2001    Q3 2001    Q4 2001    FY 2001
Travel              32%        39%        43%        32%        36%
Computer
 Hardware           14%        12%        15%        17%        15%
Apparel &
 Accessories        11%         9%         8%        11%        10%
Office              11%         7%         7%         7%         8%
Consumer 
 Electronics         5%         6%         5%         7%         6%
Books                5%         4%         4%         4%         4%
Event Tickets        2%         4%         3%         2%         3%
Home & Garden        2%         2%         3%         3%         2%
Music                2%         2%         1%         2%         2%
Health & Beauty      2%         2%         2%         2%         2%
All Other
 Categories         14%        13%         9%        13%        12%
Total              100%       100%       100%       100%       100%

Online Buying Data Predicts Industry Performance

One noteworthy contrast to the Computer industry's positive results is Gateway Inc., which recently reported a significant revenue shortfall. However, comScore data identified this trend well in advance of Gateway's report. comScore chairman Fulgoni commented that "Gateway's announcement came as no real surprise to us, since we had seen their online sales declining despite substantial growth in traffic to Gateway's Web site. It would appear that competitive pricing pressures were at the root of their problem"

"Similarly," continued Mr. Fulgoni, "comScore data clearly illustrated the surprise softness reported by booksellers in the month of September. Again, this underscores the utility of comScore data as a leading indicator of company and sector performance."

Table 4: comScore Online Book Sales by Month - Year 2001 ($ millions) 
      
Jan   Feb   Mar   Apr   May   Jun   Jul   Aug   Sep   Oct   Nov   Dec
$204  $180  $199  $160  $172  $154  $152  $171  $164  $189  $189  $233

Brisk Purchase Activity Continues From U.S. Work Machines

Past comScore research was reinforced by the finding that work-based PCs - which comprise less than half of U.S. computers - actually drive almost 60% of U.S. online dollars, with an even greater skew within certain categories (see Table 5).

Table 5: Top Categories Based on Share of U.S. Category Dollars
Purchased from U.S. at-Work PCs - (2001) 
        
Category                        Share of U.S. Category Dollars
                                Purchased from U.S. at-Work PCs
Office                                          92%
Travel                                          62%
Flowers & Gifts                                 58%
Computer Hardware                               57%
Books                                           55%
Computer Software                               54%
Consumer Electronics                            54%
Jewelry & Watches                               53%
Home & Garden                                   49%
Event Tickets                                   48%

Armed with the increased speed and convenience of a workplace Internet connection, U.S. online shoppers at work-based PCs buy more often than those at other locations such as Home, Work or Universities. They also spend the most on average per month, followed (in order) by buyers at Home, in Universities/Colleges and non-U.S. buyers.

Table 6: Average Monthly Dollars Spent per Buyer by Location (2001) 
         
Location                                Average Monthly Dollars
                                           Spent per Buyer
US Work                                         $229
US Home                                         $165
US School                                       $146
Non-U.S.                                        $128

comScore analysts noted that these findings underscore the importance of targeting advertising and promotional efforts to shoppers when they are at the true point of purchase, research and decision-making.

International Sales At U.S. Sites

comScore's report revealed for the first time that 15% of total dollar sales at U.S. e-commerce sites are to Web users residing outside of the U.S. "For retailers of categories in which International sales drive substantial revenue, this presents noteworthy opportunities and considerations in marketing strategy and product mix, driven by a more detailed understanding of worldwide category consumers," noted Mr. Hess.

Table 7: Top Categories Based on Share of Total Category Dollars
Purchased from Non-U.S. PCs - U.S. Web Sites Only (2001) 
       
Category                               Share of Total Category Dollars
                                         Purchased from Non-U.S. PCs
                                            (U.S. Web Sites Only)
Movies & Video                                          34%
Computer Software                                       30%
Music                                                   26%
        
Furniture & Appliances                                  20%
Books                                                   19%
        
Jewelry & Watches                                       18%
Video Games                                             17%
        
Gift Certificates & Coupons                             16%
Consumer Electronics                                    14%
        
Travel                                                  12%

Demographic Highlights

An analysis conducted on November 2001 comScore data found significant differences in online buying patterns across key demographic segments. For example:

• Residents of the Northeast U.S. spend more overall, driven by more frequent buying.

• A greater percentage of broadband users buy online vs. dialup users. These users spend 14% more per buyer, and buy more often. Broadband users constitute 38% of visitors but half of dollars. (Note: includes home and work users.)

• College Graduates and Post-Graduate degree holders constitute only 24% of visitors, but spend 32% of U.S. online dollars.

• Single-family and smaller households spend more on average vs. larger households.

• Families in which the age of the head of household is 45-54 spend the most per buyer, at 7% above average.

• The percent of Americans age 65+ who buy online is about on par vs. the total population, but these older online shoppers buy less often and spend less when they do.

• Households earning $75K+ per year comprise 33% of the U.S. population - but spend 43% of total U.S. online dollars.

• A smaller percentage of U.S. Hispanics buy online vs. the total population, but those Hispanics that do shop online spend 7% more than average when they do.

• Asian Americans spend more per buyer than any other group.

Links
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