• by Newswire Report , July 1, 2003

The second quarter of 2003 produced retail sales of $11.61 billion, a 15% increase over the same period in 2002 when $10.11 billion was spent, according to BizRate.com. This represents a slowing in sales growth compared to the previous year when the Q2 2002 online sales growth rate was 28%.

This deceleration in online sales growth is not due to fewer purchases taking place online but due to consumers spending less per order. Actual orders grew by 31% to 104.9 million unique transactions in Q2 2003. However, the average purchase amount has decreased by 12% to $111 in Q2 2003 compared to $126 in the same period last year.

                                      Q2 2003     Q2 2002    % Change 

Online Sales (billion)               $11.61
$10.11         15% 
Online Orders (million)              104.86       80.06         31% 
Average Purchase Amount (dollars)      $111        $126       (12%) 

"This 'go online but spend less per order' phenomenon is symptomatic of the downward pressure of price competition on the Web, and the advent of smaller transactions taking place online," said Chuck Davis, President & CEO of BizRate.com. "Shoppers are using the online channel to price comparison shop and save money, and we are beginning to see the effects."

In a BizRate.com Online Research Value Panel in May 2003, 54% of online shoppers say they are more deal-centric than last year when they shopped online. Nearly half of online buyers (47%) are using aggregators such as comparison shopping sites, shopping portals, search engines and auction sites to start their shopping versus going directly to a merchant site. Online buyers visit an average of 3.8 different sites before deciding where to purchase and will visit a single site 2.6 times before making a purchase.

Davis concluded, "As broadband penetration continues, people are adopting a 'NOW' attitude to shopping online, meaning they will purchase small one-off buys instead of waiting to fill an entire shopping cart full of goods."

                         April 2003   May 2003   June 2003  Total
Q2 
                                                              2003 
Online Sales (billion)      $3.77        $3.98     $3.86      $11.61 
Growth over 2002               11%          15%
19%         15% 

The top categories in terms of sales volume were computer hardware ($2.24 billion), electronics ($1.96 billion) and entertainment ($1.90 billion). The strongest growth in Q2 came from Gifts & Flowers (17.9%), Toys & Video Games (10.6%) and Office Supplies (8.6%) categories.