THE ECONOMIC SLUMP WILL HAVE ONLY A MARGINAL IMPACT ON EUROPEAN NET RETAIL,
FORRESTER CALCULATES


***While Online Retail Benefits From Offline's Woes, It's The Economy --Not
Terrorism-- That Is Impacting Consumer Spending***


AMSTERDAM, Netherlands, January 9, 2002 . . . While overall consumer
spending will drop by more than 5% by 2006, online sales will slide by less
than 3% compared with Forrester's earlier predictions, according to a new
brief by Forrester Research B.V. (Nasdaq: FORR). Forrester now expects
Europe's retailers to drive 147.5 billion euros in sales in 2006 against
the 151.9 billion euros forecast in June 2001. However, in 2002, we expect
online retail to reach 32.8 billion euros, a marginal increase against our
earlier projection of 32.5 billion euros.

"In April 2001, the European Commission predicted that private consumption
would grow 2.7% in 2001 and 2.3% in 2002. But in November last year, the
Commission downgraded its April prediction to 2.3% growth in 2001, and 1.7%
growth this year. The OECD and the IMF have published similar, lower
predictions for the European economy," said Forrester Research Director
Jaap Favier. "Since June last year, European consumers have changed, but
it's mass layoffs and not fear of terrorist attacks that have made their
spending cautious."

To understand what effect last autumn's terrorist attacks on the US might
have had on European Net shoppers, Forrester interviewed 45 online
retailers across Europe about their experiences since September 11. The
reality is that sales have hardly changed and terrorism has had little, if
any, effect on online shopping. Indeed, Europe's Net retailers expect
visits and purchases to increase in 2002. Beyond last year's pre-Christmas
retail explosion, offline sales will suffer over the next 18 months as
consumers tighten their belts. But, by contrast, the Net will become a
welcome tool for these penny pinchers and will serve as the perfect tool
for the purchase of cyclical goods like PC upgrades and consumer
electronics. Additionally, it will drive offline sales of other more
expensive cyclical goods like cars and white goods. Importantly, even when
the economic climate eases in 2003, many of these Net buyers will remain
loyal online shoppers.

"Bargain hunters will also flock to online travel agents but they won't
compensate for an overall decline in travel spending of 22% in 2002,"
Favier added. "To have any hope of survival, travel players must lower
their fares today -- but none the less, many online-only travel agents will
go under this year. The dust will only settle in Christmas 2002 as
consumers regain both their confidence in flying and their budget to
travel.

"Our model shows that consumers will purchase 57% more online in 2003 than
they did in 2002. The bargain hunters of early 2002 will have become
tenured Net buyers and will extend their purchases to more retail
categories and bigger-ticket items. By selling bigger baskets and across
categories, surviving retailers will reap the fruits of their customer
relationship investments and their successful adaptive response to dark
economic times."