JupiterResearch: Holiday E-Commerce to Top $21.5 Billion

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A new survey from JupiterResearch forecasts that online retail sales will exceed $21.5 billion for the holiday season, a 19 percent increase over 2003.


The New York-based market researcher expects new online buyers and higher spending per person will drive holiday e-commerce this year.


"It's hard to predict whether the re-election [of President Bush] will have a positive or negative effect on sales," said Patti Freeman Evans, senior analyst at JupiterResearch.


An estimated 86.1 million online holiday shoppers will spend an average of $250 per person. This was up from 73.3 million online holiday shoppers spending an average of $247 per person in 2003. The numbers for 2002 included an average of $257 per person spent by 53.6 million people.


JupiterResearch's estimate for average online retail spend per buyer amounts to about one-third of the $702.03 the average U.S. consumer plans to spend this holiday season across all channels, according to a forecast by Bigresearch for the National Retail Federation.


Books continue to lead the list of top holiday favorites for both men and women. Clothing and shoes, music, toys, video tapes and DVDs, gift certificates, consumer electronics, accessories, videogames and bed and bath items, in that order, were other choices. But 21 percent of men and 17 percent of the women surveyed were not sure what they would buy online. This is edging higher either because of uncertainty or perhaps because the JupiterResearch survey was conducted in September.


The Internet still is the top spot for finding holiday gift ideas as 58 percent of the survey respondents said so. Fifty-four percent cited finding better prices, 39 percent for the ability to gauge prices and wait for online and offline sales, and 31 percent for early planning and budgeting.


Multichannel messaging was important, Evans said. One-fifth of the survey respondents planned to use the Internet for coupons to use for in-store or online purchases as well as conducting research to buy only in a physical store.


The survey produced interesting results when respondents were asked how they plan to use the Internet to research gifts they will likely buy in a physical store.


Fifty-seven percent of men and 58 percent of women said they look for prices when going online for offline purchases. Comparing products and features was the next choice for both genders. But 59 percent of women respondents looked for gift ideas versus 46 percent for men.


Also, more men went online to educate themselves about a product's features compared with women. And women were more concerned about finding coupons to use in stores. They also were more focussed on finding popular products online this holiday season for offline buying.


The bottom line: men go online for more educational reasons, since they like buying consumer electronics over the Web. Women prefer ideas and special prices.


Concerns over the security of credit card and personal information online was cited by 36 percent this year and last. In 2002, it was the prime concern for 47 percent of respondents. Advertising campaigns to reduce the fear of identity theft are helping, to an extent.


"The perception is still there," Evans said. "Retailers need to be strong about their messaging."


Next on the list of worries regarding online holiday gift shopping was the difficulty in returning items. Thirty-five percent mentioned that, which was down from 38 percent in 2003 and 43 percent in 2002.


"Many retailers make it very hard for consumers to find out their return policy," she said. "Retailers should make it easy to find at checkout."


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