DESPITE RECENT GLOOMY E-TAIL NEWS, NPD EXPECTS ONLINE HOLIDAY SALES TO NEARLY DOUBLE

Online Buyers Favor Amazon.com

PORT WASHINGTON, NY, November 9, 2000 - Online sales are expected to reach $12.5 billion during the 2000 holiday season, reports leading marketing information provider, The NPD Group, Inc. Due to a surge in the number of online buyers and an increase in spending by holiday 1999 buyers, this year’s sales will nearly double last year’s revenue estimates, reveals the NPD Online Holiday e-Visory Report, a study of 4,315 Internet users. The holiday period is defined as November and December of 2000.

According to NPD, eight in every 10 Web users plan to shop online to browse for products and services this holiday season. Fifty-four million individuals plan to go ahead and complete an online transaction by purchasing at least one product or service on the Net. This is approximately two-thirds of the active Internet population.

Many online merchants can expect repeat customers. Ninety-five percent of those who bought online during holiday 1999 plan to do so again. However, these consumers comprise only half of Internet users that plan to buy online in holiday 2000, giving evidence to the dramatic surge in online holiday buyers that is expected. Additionally, 56 percent of those who bought during the previous holiday season said they expect to spend more money online this season.

"We are quite optimistic about online sales this holiday season," said Pamela J. Smith, vice president of NPD Online. "All of the elements seem to be lined up for a good turn out of online buyers. If the sites are ready for them, there should be a lot of cheering come year end."

Amazon.com is the site at which most prospective online buyers plan to purchase. According to the report, more respondents said that they intend to purchase from Amazon.com than from BarnesandNoble.com, eBay.com and ToysRUS.com combined.

Top Ten Websites from which Internet Users Plan to Buy During the Holidays

 

1. Amazon.com
    
2. BarnesandNoble.com
    
3. eBay.com
    
4. ToysRUS.com
    
5. JCPenney.com
    
6. CDNow.com
    
7. eToys.com
    
8. LandsEnd.com
    
9. Buy.com
    
10. Yahoo.com
     

Of the department stores with an online presence, JC Penney was the clear leader. More online shoppers said they plan to buy at JC Penney than their nearest department store competitor, Sears.com, which ranked number 11.

Consumers also estimate that 69 percent of the sites from which they intend to buy will be sites from which they have bought in the past. Being cautious about receiving orders in time for the holidays, most consumers plan to make the majority of their online purchases the week after Thanksgiving.

The products that most Internet users plan to buy online are books, apparel, and music. However, the travel industry, with its high price points, will capture the largest share of holiday dollars spent on the Net. Apparel, audio/visual electronics, toys, and computer hardware respectively follow as the highest revenue-producing product categories. Together, these five groups will account for approximately half of online sales in November and December.

Top Five Online Holiday Product Categories According to the Number of Buyers

1. Books
    
2. Apparel
    
3. Music
    
4. Movies/Videos/DVDs
    
5. Toys
    

Top Five Online Holiday Product Categories According to Sales Dollars

1. Travel Reservations
    
2. Apparel
    
3. Audio/Visual Electronics
    
4. Toys
    
5. Computer Hardware
    

In the spirit of the holidays, three out of every four items sold online during this period will be purchased as a gift for someone else. The product categories with the highest percentage of items bought as gifts will be: flowers/greetings, toys, infant/toddler products, video games, appliances, and jewelry/watches.

Online shoppers want to save time and avoid lines. Eighty percent of Internet users who plan to shop online during the holidays will do so because they can shop at any time they want. The benefit of avoiding crowds and lines, which is not usually at the top of reasons for shopping online as opposed to offline, increases in importance during the holiday season.

Top Five Reasons Why Consumers Shop Online During the Holidays

1. I can shop any time I want. 80%
2. I dislike dealing with crowds and lines. 56%
3. It’s easy to do comparison shopping. 52%
4. It’s faster to shop online. 49%
5. Purchases will be delivered to me. 44%

About the Study

In October, 2000 4,315 members of NPD’s Online Panel completed and submitted a survey conducted on the NPD Online Research Survey Site. Data was weighted to be representative of the Internet population. The holiday time period is defined as November and December of 2000.