Holiday shopping to increase, growth rate to drop

U.S. holiday sales will reach approximately US$11.9 billion, an 11 per cent increase over last year, and there will be more buyers. But a tight economy will have buyers spending less money individually, according to a study detailed Wednesday by Jupiter Media Metrix Inc.

Indeed, the anticipated 11 per cent growth rate over last year’s online holiday sales of US$10.8 billion represents a substantial drop from the growth rate of 54 per cent that occurred in 2000, when compared to the 1999 holiday season, according to Jupiter. The firm also anticipates more women shopping online than men this holiday season.

“We think, overall, the biggest impact will be the economy. The growth has significantly slowed from last year,” said Rob Leathern, an analyst at Jupiter, which is based in New York.

Although there will be more buyers, with 46.2 million buying online this year as opposed to 36 million in 2000, a 28 per cent increase, these buyers each will spend an average of US$258 per buyer as opposed to US$300 last year, Leathern said.

Some may buy online to avoid busy shopping malls and traveling through airport security, given the current environment subsequent to the Sept. 11 terrorist attacks, Leathern acknowledged. On the other hand, some shoppers could be dissuaded from online purchases because of concerns about the reliability of sending packages through the mail, he said.

Jupiter’s forecast is based on consumer-reported data, audience traffic measurements, and speaking to online and multi-channel retailers about their expectations, Leathern said.

Other findings by Jupiter include:

– More women are expected to shop online than men, with women accounting for 53 per cent of the total online buying population. Men, however, will have a higher per-person spending rate, because they make purchases in higher-priced categories such as consumer electronics and PCs.

– Consumers will buy from the same gift categories as last season. Top categories include books, clothing and shoes, toys, videos, and music. The largest projected drop is in the computer and computer accessories category. Last year, 24 per cent of consumers said they would buy in this category, but only 18 per cent said they would do so this year.

– E-tailers should not address terrorism fears on their Web sites or in e-mail, to risk offending customers. E-tailers also should enable gift buyers to notify recipients on the outside of the box as to the identity of the sender.