RealTime IT News

A Good News, Bad News Story

Some interesting survey results out today show a good news-bad news scenario for online shoppers during the recent holiday season.

The data shows that while 51 million U.S. consumers purchased a gift online during the 2000 holiday season and average spending increased 62 percent from the year before, another 16 million shoppers attempted to purchase online, but failed. The result: An estimated $1.5 billion in potential sales, lost.

The research from The Boston Consulting Group and Harris Interactive basically produced what the companies labeled "A Tale of Two Christmases."

"On one hand, we've seen very positive results -- there was a greater number of shoppers, who spent more and who were increasingly satisfied with the experience," said Lori Iventosch-James, director of e-commerce research for Harris. "Yet, online retailers failed to capture the more than 16 million consumers who attempted to buy a holiday gift online, but couldn't complete the purchase. These consumers represented $1.5 billion in potential sales -- and a missed opportunity few retailers can afford."

By the end of the 2000 holiday shopping season, the number of consumers who had purchased a gift online increased 28 percent from the 1999 holiday season, the research shows.

And almost half of these consumers, 23 million, were buying holiday gifts online for the very first time.

On average, online holiday shoppers spent $276 online -- 43 percent more than they had anticipated on spending going into the holiday season, and 62 percent more than the average online holiday shopper spent in 1999.

Satisfaction with the online shopping experience this past holiday season also increased, despite continuing frustrations with the purchasing process. Eighty-two percent of online purchasers indicated that they were satisfied with the experience, up from 76 percent the year before. Yet, roughly half of purchasers experienced a purchasing problem of some kind in 2000, a similar proportion of purchasers who had experienced problems in 1999.

"Our survey shows that in the 2000 holiday shopping season, site navigability and ease-of-use was less of a concern for consumers," said Michael Silverstein, BCG senior vice president and leader of the firm's consumer practice. "Back-end operations, however, continue to pose a significant challenge for online retailers."

He said most consumers who experienced a purchasing problem expressed a continuing frustration with finding out that the product they ordered was out-of-stock. And approximately five percent of gifts ordered did not arrive in time for Christmas.

"The lost order has become the difference between the winning online vendors and the losers," Silverstein said.

Looking forward to the 2001 online retail year, the survey found that online demand will continue to be strong. Already, 18 percent of online holiday shoppers have also taken advantage of many of the post-holiday online promotions, spending an average of $128 each on sale items in the weeks following Christmas.