Internet Sales See Uptick in February

A new industry report says that total consumer spending online in February
trended upward to an estimated $3.4 billion, an improvement over January’s
figure of about $3 billion.

Consumers spent an average of $248 per person in February, compared with $229
in January, according to the report from the National Retail Federation (NRF)
and Forrester Research Inc., in conjunction with Greenfield
Online.

The report also said the number of households online increased to 13.5
million in February, from 13.3 million in January.

The February figures follow a (rather expected) 50 percent sequential
spending decline in January from December. Online sales were up 43 percent
year over year from $2.4 billion in February 2000, according to the report.

Appliances experienced the largest sales increase in February, growing from
an estimated $24 million in January to $44 million in February. Jewelry and
flowers also rose collectively by nearly 40 percent — from $99 million in total in
January to more than $166 million in February. Online furniture sales also
increased significantly — from $26 million in January to $43 million in
February.

Not all categories showed improvement, however. Video sales fell to $52
million in February, from $83 million in January. Office supplies dipped 21
percent to $69 million in February, and toys and video games dropped 31
percent to reach $86 million in February

“In light of the economic slowdown, we are pleased to see that the Internet
continues to thrive as a consumer shopping channel,” said James L. McQuivey,
research director at Forrester. “It’s also reassuring to see Valentine’s Day…stir a 40 percent jump in online jewelry sales in Februa…”

Analysts at Goldman Sachs were less sanguine, saying in an advisory to
clients that “the continued deceleration can likely be attributed to slower
adoption rates, seasonality and a slower consumer spending environment. The
slower adoption reinforces our key theme that e-commerce has not crossed the
chasm to mass market adoption.”

GS also noted that a top performing category in February was travel, with
estimated sales up 28 percent month over month and 113 percent year over year
to $1.1 billion, indicating that travel continues to move online, “which
should benefit Travelocity, Expedia and priceline.com.”

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