Report: Online Consumer Spending Up 18% in Q2

U.S. consumers spent an estimated $8.28 billion online in the second quarter
of 2000, up nearly 18 percent from $7.04 billion in the first quarter,
according to the preliminary findings of a new e-commerce research report.

The surge was led by nearly 20 percent quarterly growth in the travel
services sector and a 13 percent increase in online auctions, according to
market research firm Harris Interactive and investment
bank U.S. Bancorp Piper Jaffray.

Both in terms of awareness among Internet users and share of online
purchasers, Amazon.com has the strongest e-commerce brand, followed closely
by eBay, according to the survey, part of the Harris Interactive
e.commercePulse study. The researchers polled 97,633 adult online users in
April, May and June.

“E-commerce is not dead,” said Greg Konezny, vice president and senior
e-consumer research analyst for U.S. Bancorp Piper Jaffray. “We believe the
market adjustment in April was a wake-up call to both investors and online
retailers, who were put on notice that stricter expectations were being
exerted on their performance. But it didn’t dissuade consumers from
continuing to use the Internet to buy goods and services.”

Harris Interactive and U.S. Bancorp Piper Jaffray, which joined forces in
April to provide investors with research on consumer e-commerce trends, also
found that consumers spent an additional estimated $15 billion by phone and
in stores as a result of shopping online.

This ratio of $1.74 spent off-line
for every dollar spent online is down from $1.95 for every dollar in Q1 and
$2.34 for every dollar in Q4 1999.

“More and more consumers are completing their transactions online,” said Lori
Iventosch-James, director of e-commerce research for Harris Interactive.
“This trend illustrates a growing comfort among consumers with online
purchasing and provides further evidence of the sustainability of the
Internet for business-to-consumer e-commerce.”

More people associate Amazon with e-commerce than any other site, the survey
found, and more consumers bought from Amazon than any other e-commerce site.
When asked to name the first site that came to mind when thinking about sites
that sell products or services over the Internet, nearly one in four Internet
users (24.1 percent) said Amazon.

In addition, among consumers who made an online purchase, 18.7 percent made a
purchase from Amazon. eBay’s brand was a strong second in terms of both
mindshare — it was mentioned first by 16.1 percent of Internet users — and
purchaser share (15.8 percent of online buyers bought from eBay).

Yahoo had
the third-highest mindshare (mentioned first by 4.9 percent of Internet
users); priceline.com was fourth (2.7 percent). No other site was mentioned
by more than 2 percent of Internet users.

Barnesandnoble.com attracted the third greatest share of online purchasers, 6
percent, followed by three music/video sites: BMG.com (3.9 percent); BMG’s
latest purchase, CDNow.com (3.3 percent); and ColumbiaHouse.com (3.1
percent).

The leading categories in the second quarter were Travel Services, where
sales topped $2.4 billion; Computer Hardware/Peripherals at $841 million; and
Auctions, which approached three-quarters of a billion dollars.

The markets
showing the strongest online growth were the smaller sectors of
Fitness/Sports Equipment, up 56 percent to $107 million, and Home/Garden, up
38 percent to $114 million. Sales in the online Clothing/Apparel market rose
11 percent to $684 million.

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