ComScore: Holiday E-Commerce Up 29 Percent to $15.8 Billion
The Chicago-based market researcher said consumers spent $66.5 billion on e-commerce last year, up 26 percent from 2003 estimates. Add travel, and the e-commerce estimate climbs to $117.4 billion for all of 2004.
"We know that the lines are blurring between channels, but the degree to which consumers have become comfortable maneuvering between online and offline channels was even more impressive than expected," comScore senior vice president Dan Hess said.
The nation's leading retail lobby, the National Retail Federation, estimates multichannel sales over the 2004 holidays will have risen 4.5 percent to $219.9 billion. Hard numbers from NRF are due Jan. 13 along with the release of the Commerce Department retail sales report.
But there is little doubt e-commerce was the brightest star in the retail universe, as evidenced by consumer shopping activity in November and December.
Rising consumer confidence played a role in the last-minute surge in holiday spending online and offline. E-commerce typically does not benefit from last-minute holiday buying, so the 2004 trend is surprising. Several other factors contributed to the boost in late shopping.
Retailers let consumers buy online and pick up in-store, with local delivery options as well. These options were available through the first half of the Dec. 20 week. Also, operational improvements at some major retailers let consumers buy as late as Dec. 20 for standard shipment in time for Christmas Eve.
The Web influences people to wait until the last minute because it helps make the overall shopping process more predictable and efficient, Hess said.
"On the other hand," he said, "we expected that consumers would take the opportunity to buy online and pick up in-store. But we saw an additional boost for retailers who made a commitment later in the season than ever to deliver products on time using standard shipping.
"So this was one of the wild cards we saw in the week prior to Christmas -- the extensive communication from many retailers to their customers, reminding them they could still have product shipped in time for Christmas."
Another factor came from procrastinating online shoppers in the form of the sale of gift cards soaring in the week leading up to Christmas. The ability to print or send online with virtually no lead time was key.
Also, in-store shortages of popular items like Apple Computer's iPod led to last-minute orders online.
The flowers, greetings and gift-basket category was the fastest growing this holiday season. This was evident in the week of Dec. 20 as consumers switched to gift options that could be delivered on the same or next day.
The best-selling categories over the holidays were consumer electronics and computer hardware. Computer sales were strong late into the season. Apparel sales rebounded from a weak showing in recent holiday seasons.
"Certainly much of this is channel shifting," Hess said. "It also creates new challenges for offline retail in that a consumer who conducts a precision-shopping mission -- someone who buys a product online and picks it up in-store -- is somewhat less likely to grab an armful of stocking stuffers during that pickup trip. It is on those trips that retailers do have an opportunity to cross-sell while the shopper's in the store, making it vital to win the multichannel game.
"We continue to see consumers increasingly buying more traditional products such as home and garden [items] and furniture and appliances online, which means that the online shopping basket is more diverse than it's ever been, and that the Web has woven itself throughout the shopping and buying process for virtually every consumer product category."
Mickey Alam Khan covers Internet marketing campaigns and e-commerce for DM News.com. To keep up with the latest Internet marketing news subscribe to our free weekly e-mail newsletter DM News Daily by visiting www.dmnews.com/newsletters