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 Following the terrorist attacks in the US and the subsequent action in the Middle East, it was expected that on-line retailers might benefit from the reluctance of shoppers to muddle through the high street or head out to the mall. Research firms have fortified this notion, but the e-tailers are more pessimistic.
According to a new report by NextCard, an on-line credit card company, Internet retailers such as Amazon and Ebay will benefit from an early start of holiday sales. In its survey of almost 2,500 on-line shoppers, which was carried out by Harris Interactive, the company claimed that nearly one third (32 percent) of on-line shoppers would begin their on-line holiday shopping before November.
The survey also said that Amazon.com will once again dominate the on-line shopping arena this Christmas as nearly half of all on-line shoppers (46 percent) intend to shop there this holiday season. Scott Lascelles, group vice president of loyalty marketing at NextCard, said that Amazon's performance in the e-shopping market is in line with the NextCard eCommerce Index, which has ranked the company number one for more than two years.
Gartner, the US-based research firm, confirmed NextCard's figures, which suggest that on-line retailing will hit new highs as the year draws to a close. GartnerG2, a unit of Gartner Inc., said that worldwide on-line holiday sales are forecast to reach USD25.3 billion this year, a 39 percent jump from the previous year. "The increase in on-line holiday shopping sales will be driven by increases in on-line users, buyers, and most importantly, the experience level of on-line buyers," said Mike Cruz, senior analyst for GartnerG2.
The GartnerG2 survey of 16,449 US respondents showed that 80.5 percent said they are inclined to shop at the same rate on-line this year, 13.6 percent said they will spend less on-line this holiday season and six percent said they will spend more.
Growth in Web users has been paralleled by growth in the number of e-tailers. In Europe, there has been a rapid increase in brick and click retailers coming on-line and improving their proposition in 2001, Gartner said. "E-tailers continue to improve their Web site functionality by offering stock checking, order tracking and keeping their customers informed by e-mail," said Gill Mander, business analyst for GartnerG2 Europe. "More flexible delivery times and new delivery methods are also encouraging customers to buy on-line."
These figures have arrived in the same week that Amazon.com Inc. reported its losses for the third quarter. Although Amazon is now steadily on the path to profitability, the company's revenue grew only slightly from last year.
Furthermore in a somewhat ominous sign for e-tailers, Amazon lowered its revenue forecasts for the Christmas season saying revenue growth would be no more than 10 percent higher in the fourth quarter. Another grave concern for Amazon was the revelation that sales in its books, music and videos business dropped 12 percent from a year ago.
Meanwhile Internet auction site Ebay reported its Q3 results last week with strong earnings, but warned that the current quarter may fall behind estimates as the company comes to terms with the economic slowdown. Until now the firm seemed to be immune to the impact of the slowing economic on the retail sector, and Ebay said it expected to report Q4 revenues between USD200 million and USD210 million.
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