December 23, 2000

U.S. consumers spent 10.8 billion dollars online during the 2000 holiday season - a 54 percent increase over the seven billion dollars spent last year - despite concerns of a poor holiday season, according to Jupiter Research. The latest Jupiter Post-Holiday 2000 Consumer Survey reveals that during the holiday season approximately 36 million consumers purchased online and spent an average of 304 dollars worth of merchandise.

"Online retailers who invested in improving back-end operations this year were winners in satisfying holiday online shoppers," said Heather Dougherty, analyst at Jupiter Research. "However, moving forward, the challenge is for retailers to retain and expand customer relationships, and continue to increase online sales to justify the operations investments well into 2001."

Additional key findings and analysis from the Jupiter Post-Holiday 2000 Consumer Survey - which asked more than 2000 online consumers about their holiday purchasing patterns between November and December 2000 - include:

Amid the demise of many online-only retailers, online holiday buyers continued to purchase from Internet-only retailers. Online buyers balanced their purchasing between Internet-only retailers (35 percent) and online retailers that also have a physical store or catalog (37 percent).

Despite increasing sophistication and demands by online consumers, overall satisfaction with online holiday shopping remained unchanged from last year. Ninety percent of online holiday buyers cited being "very satisfied or satisfied with buying merchandise online during the 2000 holiday season," compared to 89 percent last season.

The 2000 online holiday season marked the emergence of the mass-market consumer. According to Jupiter Research, while online purchases by the higher-income, affluent buyers have dominated in the past, purchases by lower and middle-income online users have increased.

The 10.8 billion dollars spent online this holiday season - within seven percent of Jupiter's original holiday prediction from September - marks a 126 percent increase over the 3.1 billion spent during the 1998 holiday season.
Advice For Online Retailers to Increase Revenue from Online Transactions
Dougherty believes that online retailers should adopt the following strategies to increase revenue from online transactions:

Recognize the evolving online consumer - Internet buyers are becoming more diverse in age, gender and income. This demographic shift has important implications for the sales strategies of online retailers, particularly in terms of site navigation, product presentation and customer service.

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