Two-Thirds of Net Users Shopping Online for Holidays

The latest research firm to weigh in with its online holiday shopping prediction is Cyber Dialogue, which estimates 19.4 million Americans will shop online this holiday season, representing 28 percent of online adults, or 10 percent of adults in the US.

The total includes only those adults that had made an online purchase in the past or who had not purchased online in the past but said they were “very likely” to do so during this holiday season.

Cyber Dialogue is also projecting that online holiday shopping will double the $3.9 billion that was spent online for holiday gifts in 1998. This represents an average of $400 per holiday shopper, a figure buoyed by purchases of big-ticket items such as appliances, home furnishings, and computers.

E-tailers will see sales peak in November, especially among newer Internet users. More than half (51 percent) of all Internet users and 73 percent of new users are planning to do a majority of their online shopping in November.

“Cyber Dialogue found last year that the holiday shopping season catalyzed families to shop online, and that many of those families remained online throughout 1999,” said Thomas E. Miller, VP, of Cyber Dialogue. “E-tailers that understand their customers can convert holiday shoppers into long-term relationships.”

Other findings from Cyber Dialogue:

• 63 percent of the 19.4 million Americans who intend to shop online this holiday season are men, and 37 percent are women
• 57 percent of all holiday shoppers said they expect their overall use of online services to increase when they shop online for holiday gifts, indicating that online ads will be seen by more shoppers as result of this increased time online
• 51 percent of online shoppers have children under the age of 18 in the household. Online shoppers with children will account for 55 percent of the dollars spent online.

Cyber Dialogue’s findings come from its American Internet User Survey, which consists of random in-depth interviews from 1,000 Internet users and 1,000 nonusers.

The annual “Consumer and Retailer Mood Survey: Retail Holiday Outlook” by Deloitte & Touche LLP and the National Retail Federation once again examined the role of the Internet in holiday shopping, and found that half of the consumers who use the Internet said they made at least one online purchase in the past year.

According to the Mood Survey, 42 percent of the consumers surveyed say they use the Internet, double the level from two years ago. Among households with incomes of $75,000 or more, 78 percent use the Net. These more affluent consumers spend twice as much on gifts as the lowest-income families, leading Deloitte & Touche to believe the Internet is a significant potential threat to offline retailers.

“Although Internet transactions are still a small portion of overall retail volume, the rate of growth both in usage of the Internet and in online shopping has been impressive,” said Jacquelin Fernandez, a partner with the Deloitte & Touche Consumer Business Practice Group.

Fernandez also noted that conventional retailers are moving aggressively to create an online presence. Of the retailers surveyed, 73 percent now have Web sites that showcase their merchandise; 28 percent did not have this capability a year ago. More than half are conducting product sales online.

A survey of Internet users conducted by NPD Online Research found that 68 percent plan to buy online this holiday season, while only 36 percent said they purchased online last holiday season.

NPD’s survey polled 4,601 individuals, and broke out the purchase plans on Internet shoppers by industry category, by apparel, toys and video games, and cosmetics and fragrances.

Apparel

• During the 1998 holiday season, 15 percent of Internet users purchasedclothing online
• For the 1999 holiday season, 24 percent of Internet users say they plan to purchase clothing online
• 47 percent of Internet users say they plan to purchase clothing offline this holiday season
• Among those planning to purchase clothing offline this holiday season, 59 percent are female and 41 percent are male
• Clothing purchases by Internet users for the 1999 holiday season will be divided like this: online,13 percent; store, 69 percent; catalog, 15 percent; and other, 3 percent.

Toys and Video Games

• During the 1998 holiday season, 11 percent of Internet users purchased toys online, and 6 percent purchased video games online
• For the 1999 holiday season, 23 percent of Internet users say they plan to purchase toys online, and 14 percent say they plan to purchase video games online
• Among those who plan to purchase toys online this holiday season, 65 percent are female and 35 percent are male
• Among those who plan to purchase video games online this holiday season, 56 percent are female and 44 percent are male
• Thirty-six percent of Internet users say they plan to purchase toys offline this season
• Among offline toy shoppers, 63 percent are female and 37 percent are male
• 22 percent of Internet users plan to purchase video games offline this season
• Among offline video game shoppers, 59 percent are female and 41 percent are male
• Holiday toy purchases will be divided like this: online, 20 percent; store, 67 percent; catalog, 10 percent; and other 3 percent.

Cosmetics and Fragrances

• During the 1998 holiday season, 5 percent of Internet users purchased beauty products online
• This holiday season, 11 percent of Internet users plan to purchase beauty products online
• Among those who plan to purchase beauty products online this season, 70 percent are female and 30 percent are male
• 30 percent of Internet users plan to purchase say they plan to purchase beauty products offline this holiday season
• Among those who plan to purchase beauty products offline this season, 65 percent are female and 35 percent are male
• Among Internet users who plan to buy beauty products online this year, this is how they are divided: online, 13 percent; store, 76 percent; catalog, 6 percent; and other, 5 percent.

The survey was done using the NPD Online Panel, a prerecruited sample of Internet representative individuals.

A survey by PC Data Online also found more Internet consumers expected to buy considerably more online this holiday season than they did last year.

The study found that 48 percent of 2,137 Internet shoppers surveyed during the weekend of October 22-24, 1999, said they plan to buy more holiday gifts online in than they did in 1998. Only 14 percent plan to spend less.

“The expected online buying boom is already underway,” said Cameron Meierhoefer, Internet analyst for PC Data Online. “This past weekend we learned that two forces are driving this growth. On the other hand, we have a steady stream of new users, growing more comfortable with the Web every day. Meanwhile, those who already use the Web plan to use it even more– without leaving their homes or offices.”

According to PC Data Online’s numbers, the holiday shopping season has already started for 26 percent of Internet buyers. Another 40 percent said they will begin to shop before Thanksgiving, and 33 percent are waiting until after Thanksgiving.

In the past week, 25.7 percent of Internet shoppers said they purchased computer software online (spending an average of $130.02); 23.4 percent said they bought music (spending an average of $57.98); and 18.3 percent said they bough books (Spending an average of $64.00).

With the exception of flowers and toys, most of the online purchases made during the week were not bought as gifts.

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Top 10 Categories Among Internet Shoppers
Shopping Category		% of Shoppers	Avg. Number of Items Purchased	Avg. Number of Shopping Sites Visited	Avg. Amount Spent	% Gift Purchases
1.	Computer Software	25.7%	2	4	$130.02	13%
2.	Music	23.4%	5	3	$57.98	22%
3.	Books	18.3%	4	3	$66.89	23%
4.	Videos/DVD	13.2%	3	3	$74.66	30%