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Report: Online Holiday Spending Grew Nearly 200%

Online holiday spending by Internet users rose from an average of $216 last year to $629 in 1998, a growth of 191 percent, according to a report from Zona Research Inc.

The figures are from a study of more than 1,000 Internet users. The study was designed to assess consumers' attitudes and experience after the 1998 holiday buying season.

The study also found that 58 percent of the sampled buyers had spent nothing online in 1997.

Leading the way in spending was the over-50 age group. Spending for respondents aged 50-54 on average grew 545 percent ($626 compared with $97) while spending for those over 55 rose 547 percent ($1819 vs. $281 last year).

Interestingly, while the under-25 age group is widely believed to be more Internet-savvy, this group's online holiday spending rose only 36 percent ($210 vs. last year's $154).

Though spending by men surpassed that of women by an average of $707 to $543, women's online buying rose far more dramatically, up 308 percent over last year compared with increases by men of 145 percent.

Zona's study shows that on average 26 percent of the sample's total family holiday buying was done over the Internet and that 4 percent of the respondents did in excess of 90 percent of their shopping online. Topping this category was the 35-44 age group, which as a whole performed one-third of their holiday shopping online.

"We think these results indicate the critical role Web shopping is beginning to play in the U.S. economy," said Jack Staff, Zona director and chief economist.

"Last year was the beta testing phase for online holiday shopping--could consumers find the products they want, order and pay for them, and have them delivered as desired. Now we believe the gauntlet for traditional brick and mortar stores has been thrown down. Internet-based commerce is beginning to encroach on retail as a viable shopping experience for increasing numbers of Americans."

Zona's data also showed that 61 percent of the online buyers expect to spend more money online in the coming year.

Zona Research is a subsidiary of IntelliQuest Information Group Inc. The Zona/IntelliQuest study is consistent in many ways with IntelliQuest's Internet tracking research on e-commerce and Zona's ongoing analysis of the electronic economy. Over half the sample said their primary reason for shopping online was to save time or money. And nearly one-third received their merchandise within 72 hours, and fully 8 out of 10 received their merchandise within a week. United Parcel Service (55%) and the U.S. Postal Service (32%) were the preferred carriers.

The Zona/IntelliQuest survey sampled 1,022 Internet users from IntelliQuest's Consumer Web Panel. Some 53 percent of those users shopped online during the recent holiday season and 92 percent of those shoppers bought at lease one product or service over the Internet.