Report: Holiday E-Sales To Double

Online shoppers will spend almost $20 billion (US$) this holiday season, according to a study released Tuesday by Gartner Group.

The Stamford, Connecticut-based Internet research firm is predicting that worldwide online holiday sales will reach $19.5 billion this year, an 85 percent increase over last year’s holiday season revenue of $10.5 billion.

“Explosive Internet access growth over the last two years, particularly in regions beyond North America, means that many Internet users are now familiar enough with the medium to make online purchases,” said Astrid Van Dorst, senior analyst for Gartner’s e-Business Services.

North Americans To Spend the Most

Online spending in North America is expected to increase by 69.9 percent, from $6.31 billion to $10.72 billion. North Americans are expected to generate 54 percent of this year’s holiday online shopping.

Online spending in other parts of the globe is set to grow even more dramatically. Gartner predicts e-commerce in Japan will grow more than 185 percent this holiday season, to $1.31 billion. In the Asia/Pacific region excluding Japan, consumers will spend $1.61 billion, a 91 percent increase over last year.

“We’ve witnessed strong demand for Western goods by the affluent in Asia and support by governments, retail banks, card companies and national portals to ‘Webify’ their countries,” said Van Dorst.

Online spending in Europe is set to grow by 96 percent this holiday season, to $5.38 billion. In the remaining areas of the world, online shopping will grow by 188 percent to $520 million.

Progress Amid Dissatisfaction

Gartner’s sales predictions come after two surveys released last month by the company show that online shoppers are dissatisfied with the online shopping experience.

A survey of more than 137,000 online shoppers at 123 Web sites by Gartner-owned cPulse showed that 24 percent of online shoppers were extremely dissatisfied with their online encounters and are concerned about online security, shipping costs and timely delivery.

Another survey by Gartner found that of the top 50 consumer e-tail sites, not one rated “good” or “excellent” for online customer service.

E-tailers Hope to be Prepared

Although profitable, the 1999 holidays were somewhat disappointing for both e-tailers and customers because many Internet retailers were not prepared for the large number of shoppers and had difficulties fulfilling orders in time for the holidays.

Seven e-tailers, including Toys R Us and Macy’s, did such a poor job of filing orders that they had to pay a total of $1.5 million to settle a Federal Trade Commission (FTC) action over late deliveries made during the 1999 holiday season.

According to the FTC, the e-tailers promised delivery dates when fulfillment was not possible and failed to notify customers when shipments would be late. Under the agency’s mail-and-telephone order rule, orders must be shipped within 30 days or customers must be notified and given the option of agreeing to a new shipping date or canceling the order.

Lessons Learned?

Gartner says that both consumers and shoppers have learned from last year and will be better prepared this year.

“In an effort to avoid stock outages and long delivery times, consumers are likely to shop earlier as they shop more in 2000,” said Robert Labatt, principal analyst for Gartner’s e-Business Services.

He added, “Retailers have learned their lesson, too. They have spent the year implementing real time inventory systems and are motivating consumers to shop earlier in an effort to deliver the best shopping experience possible to consumers and their children.”