Seasonal factors hit online shopping

By Francis Till

Friday 12th May 2000

Widely reported pronouncements of the b2c (business to consumer) e-commerce sector drying up are dispelled in a report from Harris Interactive that indicates first-quarter online spending equalled or surpassed the $US7 billion consumers pumped through the internet during the record-breaking fourth quarter of 1999.

An additional $US13.8 billion was spent in stores as a result of online shopping.

The report, e.commercePulse, found market penetration continues to increase for b2c, as monthly consumer participation in online shopping rose from 23.3 million to 23.8 million dotcom shoppers, most of whom are still US based.

While seasonal retail sectors such as toys and clothing declined, mainstream e-commerce staples such as auctions, health and travel all took sharp jumps upward.

Amazon also shows signs of being overtaken as the field in which it has reigned supreme continues to broaden. Book revenues jumped 12% to $US461 million and while Amazon retained the top spot, its share declined.

Online auction house eBay, on the other hand, continued to widen its lead and also began to show gains in other areas, such as the top seller of online electronics and turning in strong showings in both toys and the growing $US192 million flowers/gifts/cards sector, led by 1800Flowers.com.

Calling eBay's showing "the story of the quarter," Harris Interactive director of e-commerce research Lori Iventosch-James said "consumers are now thinking of eBay as a full-service e-commerce site."

In explaining the sector shifts, she said: "Clothing, electronics and especially toys all saw their online sales more than double during the holiday season but fall in [in the first quarter]. These drops are not just a function of decreased post-holiday demand; they illustrate that online retailers face the same challenges traditional retailers face in sustaining themselves at other times of the year."

Leaders in most retail areas hold few surprises, with JCPenney.com continuing out front in online sales of clothing, Dell.com (with Giga-
buys.com) in computers and Quixtar.com in health and beauty.

ColumbiaHouse.com re-claimed the lead in the online music/video market from Amazon, while CDNow, which many analysts have been counting out since the infamous Barron's article naming it as a company about to go broke, also made strong gains.

The quarterly Harris survey tracks on and offline shopping behaviours and attitudes of over 100,000 adult online respondents.

It covered 268 e-commerce websites in 13 vertical markets.

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