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Small Business
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The Silver Twinkle in Holiday 2001 After a devastating year for dot coms, some good news has finally emerged. A year of downbeat new releases has concluded with a very promising up note, brining cheer to Net retailers. Call it whatever cliché you like, the silver lining around the black cloud, or the twinkle in Santa's eye, but online retail sites have much to celebrate from 2001 holiday sales season. As noted in an early eBiz column, the season started with a promising lift over the Thanksgiving weekend, which is the traditional launch of Christmas gift buying. But unlike the year before, the good news continued all though the season. And the online cheer came at a time when offline retailers were fighting for their share of a downbeat seasonal market. Encouraging statistics were released by Goldman Sachs, Harris Interactive and Nielsen/NetRatings in their group "eSpending" report of online spending and traffic. The gist is that U.S. consumers spent $13.8 billion online, up 15 percent from the 2000 holiday season. The Jupiter Media Metrix Holiday 2001 E-commerce Series delivered some very encouraging news, showing that traffic at online sites was up 50 percent from a year earlier, and up 95 percent from 1999. Not surprisingly, the traffic and sales peaked during the first two weeks of December, a week or two earlier than the peak for offline retailers. In each of the weeks ended December 7 and December 14, online spenders exceeded $2.5 billion in purchases. "With the holiday-buying season behind us, we're left with one inescapable truth: the Internet has become an integral part of holiday shopping," said Charles Buchwalter, VP media research at Jupiter Media Metrix. "Unlike 2000, when online shopping started strong but then fell off, online shopping this year started strong and ended even stronger." As well as raw numbers of shoppers, the Internet also claimed a good percentage of American consumers. On any given week of November and December the number of shoppers exceeded 10 percent of the U.S. population. During most weeks the shoppers constituted more than 15 percent of Americans, and on the week of December a full 20 percent of the U.S. population purchased goods over the Internet. According to Jupiter, the Net retailers that saw the greatest increase in sales also have a brick component. While the Internet as a whole experienced a 50 percent increase in sales, the traditional retailers saw their Web sales grow by 73 percent over 2000. "We've been waiting for the inevitable dominance of traditional retailers over their pure-play counterparts, and it appears that 2001 may have been the year when it finally happened," said Ken Cassar, senior analyst at Jupiter Research. "With a few exceptions such as Amazon.com, the dominant retailers that sell merchandise directly from their sites tend to be affiliated with brick-and-mortar stores and catalogs." The top three traditional retailers during the holiday season were Columbia House, with 598,000 average daily unique visitors, Toysrus with 515,000 and Barnesandnoble with 447,000. As well as the good news, there were also some less exciting developments during the holiday season. The volume of orders that did not arrive on time for Christmas did not improve over 2000. Both years came in with a dismal 12 percent late delivery. The top performers for on-time delivery were sporting goods, health and beauty, and food and drink. Many online retailers blamed late shipments on delivery services. As for actual in-stock items, Net retailers actually did better than the year before, so there may be some merit to their complains about delivery companies. Overall, the 2001 holiday season was more than a silver lining around the dark cloud of the 2001 dot com disaster. The Christmas season may actually have ushered in a break in the stormy clouds, and that could indicate some real sunshine. Online retailing is clearly here to stay, even if the big numbers are collecting on the balance sheets of the major offline retailers. Rob Spiegel is the author of Net Strategy (Dearborn) and The Shoestring Entrepreneur's Guide to Internet Start-ups (St. Martin's Press). You can reach Rob at spiegelrob@aol.com |
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