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Holiday online shopping up 19 percent

Jan. 3, 2008

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According to two studies, during the Holiday season, eCommerce consumers shopped significantly more than they did last year, particularly on the day after Dec. 25, but they also reported being less satisfied with eTailers.

Further compounding the problem, glitches with two major retailers also caused some holiday problems.

According to comScore, for the first fifty-seven days of the holiday season, American shoppers spent almost U.S. $28 billion in overall eCommerce retail purchases. This is up 19 percent compared with the same period last year.

On average, online shoppers spent $545 million on boxing day (Dec. 26). That's more than double the spending on that day last year, as they took advantage of late-season offers and price discounts, according to comScore.

Nevertheless, it looks like online spending growth for the 2007 holiday season will fail to meet comScore's overall 20 percent forecast, and will actually drop below the 26 percent growth rate registered during this period last year.

The eCommerce research firm attributes the smaller-than-expected growth to several factors, including warmer weather in early November, and various economic challenges in 2007, including higher gas prices, the real estate crunch in the U.S., and a jittery stock market, the company said late last week.

Another important metric that dropped this holiday season compared with last year's was overall customer satisfaction, according to ForeSee Results, a provider of online customer-satisfaction measurement services.

However, if one looks at the core of the holiday shopping season (between the U.S. Thanksgiving and Christmas) spending actually increased 21 percent, compared with the same period last year.

Andrew Lipsman, a comScore senior analyst, pointed out that the 2007 online holiday shopping season was dragged down by very slow sales in November's first week, particularly in the key apparel and accessories category, as people put off buying winter clothes due to warmer-than-usual weather.

In Canada, eCommerce sales at one of the country's most popular chain stores came to an abrupt halt on Boxing Day when the Futureshop.ca Web site had to be closed down for almost two hours.

The Toronto Star reported frustrated customers hurling insults on the comany's recently launched online forums about the glitch, which appeared to be linked to the payment gateway. Best Buy Canada, which owns Future Shop, was also affected.

But Future Shop did manage to do some business with about three million customers, up 30 percent from 2006, the Star said.

While it's undeniable that economic factors also affected spending last year, the growth also naturally slows as the online retail market expands and matures, a trend that will continue, Lipsman said.

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Source: eMarketer



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