On-Line Sales Increased by 54 Percent This Holiday Season, Despite Dot Com Closures and Soft Off-Line Purchases, Says Jupiter - Brief Article - Statistical Data Included

Information Superhighways Newsletter, March, 2001

US consumers spent $10.8 billion on-line during the 2000 holiday season, a 54 percent increase over the $7 billion spent last year, despite concerns of a poor holiday season, according to Jupiter Research, the worldwide authority on Internet commerce.

The latest Jupiter Post-Holiday 2000 Consumer Survey reveals that during the holiday season approximately 36 million consumers purchased on-line and spent an average of $304 worth of merchandise.

"On-line retailers who invested in improving back-end operations this year were winners in satisfying holiday on-line shoppers," said Heather Dougherty, analyst at Jupiter Research. "However, moving forward, the challenge is for retailers to retain and expand customer relationships, and continue to increase on-line sales to justify the operations investments well into 2001."

Additional key findings and analysis from the Jupiter Post-Holiday 2000 Consumer Survey, which asked more than 2000 on-line consumers about their holiday purchasing patterns between November and December 2000, include:

- Amid the demise of many on-line-only retailers, on-line holiday buyers continued to purchase from Internet-only retailers. On-line buyers balanced their purchasing between Internet-only retailers (35 percent) and on-line retailers that also have a physical store or catalog (37 percent).

- Despite increasing sophistication and demands by on-line consumers, overall satisfaction with on-line holiday shopping remained unchanged from last year. Ninety percent of on-line holiday buyers cited being "very satisfied or satisfied with buying merchandise on-line during the 2000 holiday season," compared to 89 percent last season.

- The 2000 on-line holiday season marked the emergence of the mass-market consumer. According to Jupiter Research, while on-line purchases by the higher-income, affluent buyers have dominated in the past, purchases by lower and middle-income on-line users have increased.

- The $10.8 billion spent on-line this holiday season, within seven percent of Jupiter's original holiday prediction from September, marks a 126 percent increase over the $3.1 billion spent during the 1998 holiday season.

Dougherty believes that on-line retailers should adopt the following strategies to increase revenue from on-line transactions:

- Recognize the evolving on-line consumer. Internet buyers are becoming more diverse in age, gender, and income. This demographic shift has important implications for the sales strategies of on-line retailers, particularly in terms of site navigation, product presentation, and customer service.

- Maximize the value of the customer and encourage loyalty to drive future on-line sales. On-line retailers must be able to support the newly upgraded operations by continuing to increase on-line sales.

- Maintain communications with customers beyond the holidays to preserve and enhance existing relationships.