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Effective December 31, 2012, articles are no longer being updated on this web site.
The site is now maintained as an historical archive, covering articles from the period 1999 to 2012.


STUDY FINDS MOST SALES GOING TO RETURN CYBER-SHOPPERS

Posted on December 8, 1999

      While online shopping is expected to explode this year, only a small number of online gift buyers this Christmas are doing it for the first time, according to a study released by Forrester Research. Almost 90 percent of online holiday shoppers have purchased from e-tail sites before, and half bought gifts last year.

      "It's a pathetically small amount of first time buyers," said Seema Williams, the analyst who wrote the report. According to the study, 8.6 million households will buy gifts online this holiday season, purchasing about $4 billion worth of goods. Yet only one million of those households are new Internet shoppers. An additional 3.3 million were new to the Internet this year but had made online purchases before the holidays. That may not be the greatest return for the $1.7 billion in traditional offline advertising that online services and dot-com companies are estimated to be spending in 1999, including a sharp jump of spending in the fourth quarter.

      "Consumers don't have experience [with the Internet] yet," said Williams. "They don't trust it." And the first-time Web shoppers won't be doing much gift buying either. Williams said that most new online shoppers just don't believe a present will arrive in time. So they'll get in the car and brave the traffic and the crowds at the mall rather than risk a late gift. "They'll try this online thing for a couple presents, but they'll go back to the mall because they know they'll get the gift," Williams said.

      The Forrester report comes a day after online giant America Online released a report of its own, detailing how successful it believes online shopping has been already this holiday season. According to the AOL report, done in conjunction with International Communications Research in Pennsylvania, 4 million of AOL's 20 million subscribers shopped online over the US Thanksgiving weekend - the official kickoff of Christmas shopping season.

      Of people who consider themselves "Internet shoppers," 75 percent will buy gifts online this year, and 42 percent expect to someday do all their holiday gift shopping online, according to the report. And 78 percent of return shoppers said they planned to spend the same or more money online this year. "This research shows that consumers are increasingly embracing online shopping - especially for the holiday gift season," said Patrick Gates, vice president for e-commerce at AOL. "The more experience people have with the online medium, the more its convenience becomes entrenched in their daily lives."

      While the two studies took dramatically different spins on the issue, they aren't really contradictory. The AOL study focused mostly on the habits of return shoppers, while the Forrester report looked at who was doing the shopping. Comparing apples to apple the two studies are much closer.

      Williams said AOL's research showed that of its 4 million shoppers over Thanksgiving weekend, only 600,000 - or about 15 percent - were first-time buyers.




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