E-Commerce Sales Follow Offline Patterns

Total retail e-commerce sales in the second quarter of 1999 have nearly tripled from last year, reaching $2.56 billion, according to the second quarter Consumer Online Report from BizRate.com. The report also predicts that fourth quarter sales are expected to reach $3.25 billion.

BizRate’s report also found that e-commerce retail sales, which rose just 2.3 percent in the second quarter, followed the sales trends of brick-and-mortar retail, where sales for the second quarter are sluggish after a traditionally big first quarter. Apparel and consumer goods decreased by more than 30 percent from the first quarter, while sales in the computer goods, entertainment, food/wine, and gifts categories sustained healthy growth rates between 10 and 18 percent.

“Despite a relatively slow second quarter, e-commerce sales continue to rise, due in part to the changing face of the online buyer,” said Paul Bates, vice president of the Information Products Group at BizRate.com. “As more mainstream consumers experience Internet shopping, sales will only continue to climb to new heights.”

Category Share for Online Sales Q2 1999
Computer goods	41.4%
Entertainment	25.7%
Gifts	10.9%
Consumer goods	10.4%
Apparels	6.9%
Food/wine	3.3%
Home & Garden	1.5%

Women accounted for a growing percentage of online orders, increasing from 31 percent in the first quarter to 37 percent in the second quarter, and made up 49 percent of all first-time Web buyers.

Other findings of the report include:

• Sales were dominated by experienced online shoppers, but 60 percent of online buyers bought from new merchants
• First-time online buyers in the second quarter had an average household income of $61,000, compared to $77,000 for all online buyers, suggesting online shopping is becoming more mainstream

A separate survey of 6,800 online buyers by BizRAte.com found that only 26 percent of Internet buyers have heard of digital wallets and their capabilities. Another 16 percent have heard of digital wallets, but 58 percent are unfamiliar with the product.

Of the 51 percent of male shoppers familiar with a digital wallet, only 14 percent have used one. Of the 27 percent of female respondents aware of it, only 21 percent have experimented with the product.

Among the small population of digital wallet users, credit card information storage was the most appealing feature, followed by personal information storage, password and user name management, and order tracking. Other important uses mentioned included receipt management, address book functions, and merchant loyalty points/rewards.

Other digital wallet findings include:

• Online shoppers who have made more than 10 purchases over the Internet in the past six months are twice as likely to have used digital wallets than those making five or fewer purchases
• Microsoft Wallet appears to be the most popular digital wallet, with 61 percent of respondents using it in the past six months
• 83 percent of online buyers who use digital wallets prefer downloadable applications stored on their desktop versus wallets stored online
• Only six percent of consumer respondents were unlikely to purchase from a merchant that didn’t offer a wallet.