Consumers Shell Out $7 Billion in Holiday E-Commerce Purchases

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E-commerce sales hit $7 billion this holiday season as 25 million consumers stormed the Web to sample e-tail offerings, according to Jupiter Communications research findings released last week.


Although this was a boon for e-commerce, consumers bought in small quantities because of reservations about Web shopping. More than half of the 810 shoppers surveyed spent less than $200.


"When we look at how much money each person spent, most spent only a little bit of money. Their shopping behavior was largely experimental," said Ken Cassar, analyst for Jupiter's Digital Commerce Strategies, New York.


The flood of advertising may have done the trick, driving new buyers to the Internet. "Sales and marketing had to do with the surprisingly high level of sales, along with the economy," said Cassar. "The two conspired for a particularly large online selling season."


The buzz about this year's e-commerce spending surge is starting already, as 35 percent of shoppers anticipate they will spend more online. Only 4 percent said their experience during the holiday season has convinced them to purchase less on the Web.


Despite the many consumer complaints about unfulfilled orders and atrocious customer service, 90 percent of online buyers said they were largely satisfied with their shopping experience. This was largely because of low expectations before the holiday season, said Cassar. "Plus, shopping traffic peaked Dec. 18 last year, and this year it peaked Dec. 12. People realized they had to order fairly early if they wanted to get their gifts for Christmas."


When asked what were their primary sources of dissatisfaction this year, 24 percent of consumers said out-of-stock products were their No. 1 gripe. Twenty-one percent complained about the high cost of shipping and handling, and 18 percent were put off by the slow performance of shopping sites.


Price did not play as big a part in shopper's decisions to buy online as many analysts anticipated. Amazon.com (not the cheapest e-commerce site on the Net) took in 10 percent of all e-commerce sales in fourth quarter 1999, according to Harris Interactive, San Francisco. It dominated the book, music & video and electronics categories.


"You get what you pay for," said Cassar. "If you pay a buck less, it may mean waiting an extra week."
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