January 13, 2005

According to a recent survey, online Christmas and Holiday shopping increased over 25 percent in the weeks of December, as bargain hunters opted for Internet retail portals instead of struggling with crowds at traditional brick and mortar stores.

The eSpending Report from Goldman Sachs, Harris Interactive and Nielsen//NetRatings showed sales in 2004 jumped to $23.2 billion, up $4.7 billon, from 2003. The numbers do not include online travel purchases.

The report is based on surveys of more than 1,000 respondents who purchased gifts online between Nov. 1 and Dec. 26.

Shoppers cited convenience, variety and bargains as the three top reasons they bought gifts online, according to the survey.

"Online shopping contributed significantly to overall 2004 holiday sales by attracting consumers through a broad product selection," Heather Dougherty, senior retail analyst at Nielsen//NetRatings, said in a statement.

Clothing once again remained the most popular purchase, as consumers shelled out $3.8 billion, or 16 percent of total online sales for merchandise. The toy/video game market, much like in traditional stores, was a big holiday seller, accounting for $2.5 billion, or 11 percent of online revenue. The electronics category rounded out the top three with $2.3 billion, or 10 percent of total of online sales.

"Consumers have become accustomed to purchasing online over the years and look to the Internet to find comprehensive product information, competitive prices and easy gift delivery, allowing them to have more time to spend on other holiday activities," Dougherty said.

Jewelry made the biggest strides this season, with sales on the Internet increasing 113 percent to $1.9 billion. In 2003, it failed to reach the billion dollar mark with total sales clocking out at $888 million.

The report also suggests consumers have become more familiar and trusting with their online buying options.

Thirty-six percent said avoiding crowds was the primary reason they purchased online, while the same percentage said lower prices were why they beat a path to the computer rather than Main Street. Another 33 percent cited increased product selection.

The survey also showed 37 percent were "very satisfied" with shopping online during the holidays, while 24 percent were "somewhat satisfied." Thirty percent said their online shopping experience had improved over 2003.

Source: Internet News

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