Survey: online retail sales climb

Even as some brick-and-mortar retailers in the US have been lamenting disappointing holiday sales figures in their stores so far this season, online retail spending rose from $US4.4 billion in October to nearly $US6.4 billion in November.

          Even as some brick-and-mortar retailers have been lamenting disappointing holiday sales figures in their stores so far this season, online retail spending rose from $US4.4 billion in October to nearly $US6.4 billion in November.

          According to a monthly survey issued last week by the National Retail Federation (NRF) and Forrester Research, online sales in November 2000 exceeded the combined sales of last November and December by more than 25% -- or $US1.4 billion, according to Scott Silverman, a vice president of internet retailing at the NRF.

          "Even if December 2000 is equal [to] or even slightly lower than November, we can still expect online spending in 2000 to more than double last year's performance," Silverman says.

          The NRF is a Washington-based retail trade association with more than 1.4 million member stores.

          According to Barrett Ladd, an analyst at Gomez Advisors in Waltham, Massachusetts, the numbers show that even with recent "doom and gloom" about the nation's economic picture and a long list of pure-play internet companies that have gone out of business in recent months, the future for online retail sales remains one of growth.

          "There's so many more sites online, and there's so many more click-and-mortar [businesses that] have a strong online presence," Ladd says. "There are so many more internet users at this point who are actually transacting business online that those numbers are going up."

          The growth is showing up in online sales because it's still developing, while brick-and-mortar stores have less opportunity to increase sales in such volumes, she says.

          Paul Ritter, an analyst at The Yankee Group in Boston, says that while the numbers are pleasing, many retailers both online and off-line have had to use enticements and discounts to get shoppers to buy, which will hurt profit margins.

          While the overall sales figures are good, Ritter says, "it's the net results that really matter."

          About 10% of online retailers will have great success this holiday shopping season, Ritter says, while the other 90% will probably have less growth than they expect.

          The NRF/Forrester findings also showed that more than 22 million households shopped online in November, spending an average of $US285 per person.

          The monthly NRF/Forrester Online Retail Index survey was done in conjunction with Greenfield Online in Wilton, Connecticut.

          The survey tracks sales of toys, sporting goods, apparel, books, music, videos, flowers, linens, large and small appliances, tools and hardware, airline tickets, car rentals, hotel reservations, computer hardware, consumer electronics, footwear, garden supplies and more.

          The largest online sales increases from October to November were seen in the toys, sporting goods and apparel categories. Online sales of toys and videogames increased from $US203 million to $US673 million, while online sales of sporting goods shot from $US68 million to $US152 million. Apparel sales rose from $US253 million to $US525 million.

          Still, some online retailers in even the highest growth areas are encountering problems. Los Angeles-based eToys said last week that its quarterly results will be substantially below plan, and layoffs next month are likely.

          Online sales remain a small part of overall US holiday purchases. Wal-Mart Stores alone says its November sales exceeded $US16.4 billion. The NRF says that retail sales for the holiday season in 1999 topped $US186 billion.

          The NRF/Forrester Online Retail Index collects data from online shoppers to measure the growth of sales. The index is based on 5000 responses during the first nine business days of the month from an online panel developed by Greenfield Online. The survey results for November were collected from December 1 to 11.

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