Online Retail Spending to Climb 20% in Q4

  • by November 13, 2001
eMarketer reports that online consumer spending will reach $10.7 billion in Q4 2001 -- a record quarter for the internet channel and a 20.2% increase over last year. Compared to the 2000 holiday season, 14.1 million more people will buy online this year.

In its Online Holiday Shopping 2001 report, eMarketer underscores that its retail projection is one of many, with nine research firms offering nine figures, ranging from $9.5 to $12.4 billion. However, eMarketer's number is based not on one study, but on a purchasing model aggregating data from dozens of sources. Additionally, eMarketer is benchmarking its e-retail projections against the quarterly assessments from the US Department of Commerce.

"By recognizing the Department of Commerce as the definitive measure of historical online sales, we will be holding ourselves - and our Q4 projection - accountable," said eMarketer CEO Geoff Ramsey. "We, and everyone else, will know how well we did several months from now."

Complicating matters, research firms have varying definitions for the holiday period. Many, including eMarketer and the US Department of Commerce, define the holiday season as October through December. Others, such as Nielsen//NetRatings and Jupiter include only November and December, and Forrester Research includes the five weeks before Christmas. Additionally, Forrester and Jupiter include the historically large but now volatile travel sector in their projections.

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In Q4 2001, 58.7 million US residents will buy online, spending an average of $182.25. Spending will be affected by several factors this year:

* There will be 14.1 million additional online buyers in Q4 2001, 4.9 million of them buying online for the first time

* Shopping online is perceived as more convenient and now safer than malls and shopping centers

* Many will shop online instead of traveling to deliver gifts to loved ones

* The deteriorating economy will negatively impact online sales

"The economic malaise will constrain online and overall retail spending this year," said Ramsey. "Unlike previous years where online spending rode the roller coaster straight up, regardless of overall retail activity, this year e-commerce will be more closely aligned with general patterns of consumer spending."

Last year, online Q4 spending rose 71% over 1999, far outpacing the single-digit retail sales growth. And while the 2001 online holiday season will be affected by the economic downturn, the influx of additional shoppers will spur growth that outpaces the 2.2% rise in overall US retail sales predicted by the National Retail Federation.

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