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Non-travel eCommerce sales up 23 percent in December

December 21, 2005

According to the latest "2005 eCommerce Holiday Shopping Update" from comScore, initial sales reports from a wide range of sources seem to indicate holiday sales will make e-Tailers happy. comScore's report states that non-travel spending for the first 46 days of the holiday season from Nov. 1st through Dec. 16 were almost $15.9 billion, a strong 23 percent increase over the same period last year.

In comparison, last October eMarketer estimated that 2005 non-travel eCommerce retail sales would reach $19.4 billion for the traditionally defined holiday shopping period of November and December, up 22.2 percent over last year.

So far, Monday December 12th and Tuesday December 13th are the top two spending days at $556 and $554 million, respectively. Amazingly, the combined value of US online retail sales for those two days topped $1.1 billion. The much-touted "Black Monday," November the 28th, was only the ninth busiest day at $484 million.

ComScore continues to estimate that US Internet sales will exceed $19 million (excluding travel) for the 2005 holiday season (November/December), which would represent 24% growth over 2005.

According to the latest Goldman Sachs, Nielsen//NetRatings and Harris Interactive "Holiday eSpending Report," online shoppers spent $18.6 billion during the first six weeks (October 29 - December 9) of the 2005 holiday season (again, excluding travel).

That is a 16% increase for US online spending versus the same period in 2004. In addition, the reports states that 19% of consumers indicated that they hadn't started their holiday shopping yet.

Looking into where the money is going, the eSpending Report found that online shoppers were spending the most on apparel/clothing, which totaled $3.4 billion thus far, or 17% of total online revenues. The consumer electronics and computer hardware/peripherals categories placed second and third with total revenues of $2.8 billion and $2.7 billion, respectively.

"Apparel and consumer electronics are consistently among the most popular gifts purchased during the holidays, resulting in the largest share of online revenue.

Additionally, sales in the computer hardware category have been fueled by aggressive discounting on items, such as PCs and laptops," said Heather Dougherty of Nielsen//NetRatings. "The combination of well-known brands and retailers in the top categories strongly complement and drive online sales, because consumers trust and have confidence in both."

Much of the online sales this holiday season also seem to be going to smaller retailers. In an article in the New York Times, Forrester Research estimates that small retailers will account for 45% of holiday online sales in 2005, up a healthy 42% from last year. The increase is credited to two factors: Google and "consumers who are fussier than ever."

Not only are many customers looking for different or offbeat gifts something not available in the local mall those items are now easier to find. A combination of cheap but sophisticated storefronts available from Yahoo! and Amazon, and SEM are leveling the retail playing field.

The game has changed," Gene Alvarez, an analyst with Gartner told the Times. "Before, people couldn't find these smaller guys, but now [they] can be much more easily discovered on Google."

On a somewhat less optimistic note, the "Ka-Ching! Will Cash Registers Ring in the All-Important Fourth Quarter for Retailers?" report from Compete, Inc. indicates that the Internet may be actually helping to hold down overall holiday spending.

The report found that 83% of consumers plan to spend less or about the same this holiday season, compared to last year.

Consumers are saving money on holiday shopping by looking for bargains, buying fewer gifts and making less expensive purchases and the Internet is helping them do it.

Whether consumers actually purchase online or not, the Internet is increasingly becoming a factor in the purchase decision.

Compete found that 41% of consumers use the Internet to research and browse for the best holiday deals, but end up making purchases in a store. Conversely, 48% agree that if they find a gift in a store, they will probably use the Internet to check for the lowest price.

Source: eMarketer

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