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THE E-COMMERCE EVOLUTION

Source: ECommerce-guide.com

Posted on April 28, 2002

      I'm a little burned out on aggregate market reports these days, but this one caught my eye: comScore Networks said recently that its review of consumer e-commerce for the first quarter of 2002 showed consumer sales in the United States set a record of about $17 billion.

      I'm reminded of what the late Illinois Senator Everett Dirksen once said: "A billion here and a billion there, and pretty soon you're talking about real money."

      It looks like this Internet thing might have some legs after all, despite the hundreds of dot bombs.

      Reston, Va.-based comScore said that its e-commerce spending figure, which includes money spent on travel and excludes money spent at online auction sites, was up 8 percent from the last quarter of 2001 and up 48 percent from the same period a year ago.

      Absent travel, online sales totaled an estimated $10.1 billion, reflecting 30 percent growth over the first quarter of 2001 and a decline of 7 percent versus the holiday-driven fourth quarter of 2001. Travel accounted for 41 percent of total consumer e-commerce sales, according to comScore.

      Travel clearly remains the shining star of e-commerce.

      The online travel sector enjoyed an almost immediate resurgence at the start of January 2002, comScore said. Consumers spent nearly $7 billion at domestic travel sites in the first quarter of 2002, an increase of 87 percent versus the same period in 2001 and 39 percent above the fourth quarter of 2001, which saw a huge slump caused by the terrorist attack on the United States.

      "Throughout the holiday season, many consumers suspended their travel plans -- and in turn saved their travel dollars," said comScore vice president Dan Hess. "Now that many of those same consumers are taking to the skies again, travel providers and service agencies are benefiting from those newly reopened wallets."

      "We saw a new average daily record set every month," he said.

      You can, of course, see empirical evidence of that in things like Expedia's recent earnings news.

      The leading non-travel category was Computer Hardware, on which consumers spent an estimated $2.39 billion in the first quarter, followed by Office Supplies, at $1.69 billion. Apparel & Accessories was third at $1.29 billion.

      Interestingly, comScore reported that online apparel sales were approximately flat (down 1 percent) vs. last year, while the Books category also declined 5 percent at $557 million in sales.

      "Historically these have been major categories online, but they were also early entrants to e-commerce," said Hess. "Given their maturity online, it stands to reason that strong growth will be harder to produce in the months and years to come."

      Consumers bought $581 million in Event Tickets, comScore said, more than double the prior year's level and 52 percent higher than the prior quarter.

      What I like about comScore's figures is that they are projections based on the actual dollars and cents buying activity of a representative (and massive) cross-section of more than 1.5 million Internet users. All these folks have given comScore permission to confidentially monitor their browsing and buying behavior using the company's patent-pending technology.

      So we're talking money spent, not just site visitors. And there's no doubt about it, pretty soon it'll be real money.




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