3 Big California Cities Top Wired-Shopping List

Three California cities topped the rankings of the most wired shopping cities in the United States, while New York slipped from eighth place to No. 10.

San Francisco, Los Angeles and San Diego were first, second and third on the list compiled by America Online Inc. in its third annual online shopping cities survey. Findings were based on a composite ranking of the number of times respondents research and buy online monthly.

“You have a much better ability to shop a multitude of stores in a more concentrated area [like New York] whereas, if you think about the West Coast, it's very spread out,” said Patrick Gates, New York-based senior vice president of commerce at AOL.

San Francisco moved up from fifth to replace last year's No. 1, Nashville, TN. Los Angeles maintained its second-place ranking, and San Diego moved up seven notches from No. 10.

Southern cities took the next positions. Raleigh, NC, was No. 4, down from third last year. Dallas/Fort Worth rose from last year's 17th place to No. 5. Atlanta moved from 13th place to No. 6.

Washington, DC, slid a notch to No. 7. Seattle/Tacoma was the sole representative from the Pacific Northwest, climbing from 14th place last year to eighth. Miami/Fort Lauderdale maintained ninth place.

Dallas/Fort Worth and Atlanta cracked the top 10 for the first time since AOL began the rankings. Atlanta took the top spot for money spent online monthly: $275.20.

Nashville's fall was dramatic, going from the top-ranked city to 22nd this year as the number of online purchases declined sharply. AOL could not explain the sudden change in behavior. Also, Baltimore was edged off the top 10 for the first time.

Equally embarrassing was New York's performance. The Big Apple was No. 2 on AOL's first wired list in 2002. The survey found New Yorkers researched more online last year but reported buying fewer items from the channel.

AOL commissioned Opinion Place, the online research arm of DMS, to survey 6,250 male and female adult respondents who research, browse or buy products and services online at least once each month.

The survey, conducted Aug. 19-Sept. 9, yielded positive results for e-commerce. Respondents plan to spend 53 percent of their holiday budget via the Internet this year, overtaking traditional retail channels for the first time. These shoppers will increase their online spending 6.5 percent to $295 versus $277 in 2003.

But respondents plan to spend 3.6 percent less overall: $558 versus $578 in 2003. The estimate is much more conservative than the National Retail Federation's $700+ projection on multichannel holiday spending this year.

The wired shopping cities survey also revealed that the top three cities in this year's list increased their online research more than 20 percent over 2003. Comparison-shopping tools and search engines are being used with more sophistication.

“What that tells us is that consumers are much more comfortable using research because it's become a lot more simpler and easier to understand than in the years past,” Gates said.

Sprawl could be another reason for the growth of online research and shopping, he admitted. Though San Francisco is dense like New York, Los Angeles and San Diego do not have many stores in close proximity to each other. Many retailers have realized that as well, and so have chain stores with e-commerce sites.

“I think that when your selection is reduced for some reason, where else do you turn but online for products you're looking for,” Gates said. “[Also], big box retailers have figured out their multichannel strategies. Consumers trust those brands and are comfortable shopping either through catalogs, online or in-store with these retailers.”

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