Apparel Claims Top Spot in Holiday E-Commerce

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Non-travel online holiday spending for Oct. 29 to Dec. 23 totaled $30.1 billion, according to an estimate by Nielsen//NetRatings, Harris Interactive and Goldman, Sachs & Co.


The estimate, influenced by inclusion of online auctions, reflected a 30 percent rise in online holiday sales this year versus last.


Another estimate from comScore Networks puts online holiday e-commerce at $18.11 billion, up 25 percent from the year-ago period. These numbers, for Nov. 1 to Dec. 25, exclude travel, auctions and large corporate purchases. That estimate also matches Forrester Research's forecast.


Nielsen//NetRatings said consumers spent $5.35 billion on apparel this time, up 42 percent and making apparel the No. 1 category. Computer hardware/peripherals' stood second at $4.82 billion, up 126 percent year over year. Consumer electronics was third, with spending up 109 percent to slightly under $4.79 billion.


"It was a gadget Christmas we saw," said Heather Dougherty, senior retail analyst at Nielsen//NetRatings, New York.


Notebook computers, plasma screen televisions and color printers, along with media accessories, digital cameras and Apple iPods, all made it into millions of shopping baskets online.


"Hardware and consumer electronics are very strong online categories because of the ease with which you can comparison shop," she said.


The lack of a must-have toy this holiday season led to a 9 percent drop in this category's online sales to $2.30 billion. Toys and video games hardware and software were fifth of the top sellers online.


Books, a staple of e-commerce, kept fourth place, with 66 percent growth in online holiday sales to $2.95 billion.


Discounts, Free Shipping


A few trends emerged this online holiday season. First, much shopping occurred online in the two weeks preceding Christmas. Second, discounts and free shipping worked wonders. Also, sales of event tickets, sports and fitness products, and gift cards soared.


"Certainly, the power of promotions helped, and free shipping continues to be king," Dougherty said. "A big implication this year is the trust in on-time delivery, which drives significant sales in the final week leading up to Christmas."


Rapid Channel Shifting


A major change this holiday season is the bricks-and-mortar channel's weakening influence. A Nielsen//NetRatings survey of 8,600-plus consumers showed physical stores accounted for 68 percent of 2005 holiday shopping, down from 72 percent in 2004, 74 percent in 2003 and 78 percent in 2002.


E-commerce's share climbed to 27 percent in 2005 versus 22 percent in 2004, 20 percent in 2003 and 16 percent in 2002.


Catalog sales dropped marginally to 5 percent of overall holiday shopping budgets in 2005, down from 6 percent in 2004, 2003 and 2002.


Nielsen//NetRatings' research shows e-commerce benefits from convenience, lower prices and product selection, along with the ease of search through Google and Yahoo. A longer 2005 holiday shopping season also helped.


Amazing Amazon


Data compiled by Internet monitoring service Hitwise USA, Nielsen//NetRatings and comScore Networks all conclude one fact: eBay, Amazon and Walmart.com, in that order, were the most-shopped sites in the 2005 holiday season.


While eBay towered over the other two and Walmart.com inched its way to online retail dominance matching offline, Amazon said the 2005 holidays were its best ever. Customers ordered 108 million products worldwide in the company's 11th holiday season. Besides the flagship U.S. online store, Amazon has versions for Canada, Britain, France, Germany and Japan.


Another single-day Amazon record occurred Dec. 12 when the company tracked more than 3.6 million products ordered, or 41 items each second.


Proving the National Retail Federation right, gift certificates were a hit with Amazon customers: 600,000 were ordered Nov. 25 to Dec. 22. And the most expensive product bought in Amazon's U.S. jewelry and watches store was a pair of diamond earrings costing $94,000.


The Seattle retailer also claimed to have shipped more than 99 percent of orders to 200-plus markets worldwide in time to meet holiday deadlines. One of its most remote orders was a Panasonic camcorder with four-inch screen to Napaskiak in Alaska.


Mickey Alam Khan covers Internet marketing campaigns and e-commerce, agency news as well as circulation for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters
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