Online Holiday Shopping Growing Only Slowly

Online shopping figures may be overhyped, a new study claims, as Net-shopping numbers can be described as steady but not surging. The 1999 Online Holiday Shopping Survey from Zoomerang asks if 1999 is really is the year that Internet commerce has taken off, why are the real-world shopping malls still so crowded?

The survey found while the percentage of people shopping online this year has grown from 33 percent last year to 75 percent this year, most online shoppers will spend less than 20 percent of their overall holiday budget online.

Zoomerang says that the survey focused on primarily "Internet-savvy" users. Ninety-five percent of the respondents categorized themselves as either intermediate (48 percent) or expert (47 percent) Internet users.

Only 37 percent of the respondents shopped online last year for their holiday gifts. This compared with 70 percent this year, although most respondents (56 percent) said that they would only execute between zero and 20 percent of their holiday purchases online.

The survey found that the top three reasons for shopping online were: more choices/inventory (40 percent); best prices (40 percent); and most convenient (69 percent).

The research also found that books (75 percent) and music CDs (64 percent) are overwhelmingly the most popular items to purchase on the Web. However, only 19 percent of respondents said that they were planning on shopping at the most popular e-commerce Web sites – such as Amazon.com, LandsEnd.com, and so on.

Zoomerang reports that 43 percent of its respondents plan on browsing the Web to see what they can find.

Interestingly, the main reasons cited for not shopping online were the inability to "touch and feel" (43 percent); service issues (38 percent); and security plus privacy (31 percent).

Bud Werner, Zoomerang’s general manager, said while most businesses are caught up in the current stampede of companies rushing to establish an e-commerce presence of the Web, "it’s important that retailers stop a moment and pay attention to surveys."

"E-commerce is definitely growing at a rapid pace, but the smart businesspeople are the ones that listen to their customers and are prepared to offer them what they want," he said.

Werner said that the survey was carried out to lay the groundwork for the new Zoomerang service, which consists of dozens of professionally developed survey templates for online companies.

Using these templates, the firm says that customer Web sites can quickly create their own feedback systems for rapid access to customer comments. Zoomerang’s Web site is at http://www.zoomerang.com.

Top

While many electronic retailers are meeting or beating the sales amounts they had projected for the holiday season, the e-frontier has not been kind to every "dot com" e-retailer on the Web, according to a new study by International Data Corp. (IDC).

A full 29 percent of e-tailers surveyed said their 1999 holiday sales are exceeding "lofty" expectations, IDC reported. Of that number, 6 percent said their sales are "far, far over expectations" and 23 percent reported sales that are "over expectations."

Fifty-five percent, meantime, said their sales were "in line with their aggressive plans," IDC said.

Of all the companies saying their revenues were up, 25 percent said their sales were higher by more than 100 percent, while 50 percent reported increased revenues by 60 percent or more.

But all is not well on the Internet. Sixteen percent of Internet companies with specific sales results said their revenues were flat, while one in 10 vendors said their sales were "very much under expectations." Six percent said their sales were "slightly under expectations" for the holiday season.

An additional 37 percent said they are experiencing very modest growth.

Of the problems being experienced by e-tailers this year, some of the more significant issues include:

Other e-tailing problems include:

From its latest survey, IDC said it is sticking by its earlier forecast that the Internet will see $7.1 billion in revenues for the fourth quarter of 1999 in the US, up 64 percent from the same quarter a year ago.

But all is not well for everyone. "The Internet is not made of streets paved with gold," IDC officials said in a statement. "IDC expects that several pre-IPO companies, banking on strong fourth-quarter revenue, will not see Santa next year. Mergers, consolidations, or acquisitions of those vendors are likely in the coming quarters. Nonetheless, most vendors expressed that they are committed to e-commerce and will seek to address the challenges they have faced and find their own path to success."

For its latest survey, IDC used the Web to collect data and opinions from Internet executives at 50 online retailers. Those contacted are participants in IDC’s Internet Executive ePanel, a group of 1,000 executives at online merchants. Survey respondents reflect a range of companies, from major, established e-commerce brands to a healthy dose of "dot com" start-ups. Surveys were completed Dec. 13 through Dec. 15.

Top