Online Shoppers Buying it All

Online shopping got off to a quick start this holiday season, with
e-tailers reporting a consumer spending increase of 24 percent over last
holiday season, according to a survey.

Non-travel online spending reached $9.75 billion during the first month of
what is considered the beginning of the holiday shopping season, according
to comScore Network’s 2005 Online Holiday Shopping Update.

From Nov. 1 to Dec. 2, shoppers not only spent more but were willing to
purchase a wider variety of products than they did during the same period
last year, according to the market research firm.

Spending on what has become known as “Cyber Monday,” the biggest online
shopping day, increased 26 percent over last year to $485 million.

And according to the Research 2005 eHoliday Mood Study, 77
percent of online retailers said that their sales increased substantially last year over the preceding year on the Monday
after Thanksgiving.

Gian Fulgoni, chairman of comScore Networks, said increased experience and
comfort with buying online are likely variables that have led to consumers’
willingness to purchase a wider variety of goods at higher prices.

“Early results confirm that this is going to be another excellent year for
online buying,” Fulgoni said in a statement.

The study showed purchases of sports and fitness equipment is up 59 percent;
furniture, appliances and equipment saw a 50 percent increase; and apparel
and accessories rose 37 percent.

Overall spending growth is expected to remain steady at 24 percent through
the end of December, according to comScore Networks.

And while more money is spent online this year, is appears that fewer
shoppers are accounting for the bulk of sales.

Nearly one-fifth of the U.S. online shoppers account for nearly half of
total online spending, according to another study.

Nielsen//NetRatings reported that the heaviest online buyers, dubbed “Most
Valuable Purchasers”
(MVPs), accounted for 18 percent of the online buying

However, most online shoppers, 55 percent, spent less and bought less
frequently, according to the firm.

“Each retailer needs to analyze its own customer base to identify its
respective MVPs and develop targeted marketing programs that will maximize
revenue from these shoppers,” Heather Dougherty, senior retail analyst with
Nielsen//NetRatings, said in a statement.

“Not only are the MVPs valuable
based upon sales and number of purchases, they are also inordinately loyal
to the retailers that they purchase from.”

Dougherty suggests online retailers tailor loyalty programs that reward the
“MVPs” for purchasing at their sites in order to drive repeat sales and
maintain a strong relationship with these customers throughout the year.

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