AOL Reports Shopping Online Accelerating, With New Shop@AOL, Commerce Efforts Attracting 25,000 First-time Buyers Each Day; Independent Research Shows Strong Repeat Buying Trends - Industry Trend or Event

Edge: Work-Group Computing Report, Oct 11, 1999

America Online continues to serve as online consumers' primary gateway to e-commerce, according to new information released by the world's leading interactive services company.

With approximately 60 days until the beginning of the most important retail season of the year, and the rollout of its new shopping destination -- Shop@AOL -- almost complete, the Company has announced that it more than doubled the number of its members shopping online in the last year and is bringing approximately 25,000 new buyers into the online marketplace for its merchant partners every day.

According to research from Bennett, Petts and Blumenthal, the number of AOL members who say they have made online purchases rose from 5.5 million in June 1998 to more than 11 million in August 1999.

Reinforcing this strong growth in first time buyers on AOL is new data from Internet Research Group (IRG) indicating that repeat purchases are also rising. Almost five million AOL members are now making online purchases every month; and 80% of AOL buyers each month now report they are likely to make an online purchase "again next month."

According to IRG, total online spending by AOL members rose to $2.1 billion in the quarter ending June 30, 1999 -- up from $1.8 billion the prior quarter and $1.2 billion during the 1998 Christmas holiday shopping season, the period between November 26 and December 27. Traditionally, retail sales slow in the months directly following the holiday season.

New AOL members are not taking long to adopt the online shopping habit. The IRG research shows that almost half (43%) of all new AOL buyers have been online for just six months or less.

The IRG research also reveals that more than half of those new to shopping on AOL are women, who now account for 60% of the total number of first time AOL buyers every month. Women AOL shoppers are also making the same number of purchases as men AOL shoppers, or more than two per month.

Bob Pittman, President and COO of America Online, Inc., said: "It's clear that more and more mass market consumers who join AOL are making online shopping a part of their daily lives. They increasingly are recognizing the unparalleled ease and convenience that AOL brings to online shopping with brand-name merchants they know and trust.

"Our Shop@AOL online shopping destination, which we are rolling out in conjunction with our next generation software AOL 5.0, focuses on bringing the largest audience of online buyers together with the best in online retailers and giving them incredible products, selection and values.

"As AOL members shop online in unprecedented numbers, this consumer-oriented strategy is proving to be a winning combination for both our company and our merchant partners."

Founded in 1985, America Online, Inc., based in Dulles, Virginia, is the world's leader in interactive services, Web brands, Internet technologies, and e-commerce services.

America Online, Inc. operates: two worldwide Internet services, America Online, with more than 18 million members, and CompuServe, with approximately 2 million members; several leading Internet brands including ICQ, AOL Instant Messenger and Digital City, Inc.; the Netscape Netcenter and AOL.COM portals; the Netscape Navigator and Communicator browsers; and AOL MovieFone, the nation's No. 1 movie listing guide and ticketing service.

Through its strategic alliance with Sun Microsystems, the Company develops and offers easy-to-deploy, end-to-end e-commerce and enterprise solutions for companies operating in the Net Economy.