Report: No Slowdown for Online Spending

Consumers spent US$3.4 billion online in February — 13.3 percent more than the $3 billion spent online in January — according to numbers released Thursday by the National Retail Federation (NRF) and Forrester Research.

“In light of the economic slowdown, we are pleased to see that the Internet continues to thrive as a consumer shopping channel,” Forrester research director James L. McQuivey said.

Overall spending was not the only metric that increased during the month, according to the report. The number of households shopping online also increased from 13.3 million in January to 13.5 million in February, and per person spending increased from $228 in January to $308 in February.

“Physical retailers were challenged in February by, among other things, bad weather in many parts of the country, which kept many consumers house-bound,” said NRF president and chief executive officer Tracy Mullin.

Last year, online spending dropped from $2.8 billion in January to $2.4 billion in February, according to the NRF/Forrester Online Retail Index.

Applying for Appliances

The NRF/Forrester index, which was formulated in conjunction with Greenfield Online, revealed that appliance purchases saw the largest increase, growing from $24 million in January to $44 million in February.

Other big winners include Valentine’s Day-fueled purchases of jewelry and flowers, which grew from $99 million in January to more than $166 million in February; online furniture sales, growing from $26 million in January to $43 million in February; and consumer electronics, increasing from $179 million to $196 million.

McQuivey commented that it was “reassuring to see the Valentine’s Day love fires stir a 40 percent jump in online jewelry sales in February.”

Consumers also increased their online spending on travel-related purchases. Airline ticket buys increased from $501 million in January to $605 million in February, hotel reservations grew from $229 million to $306 million, and rental car reservations climbed from $113 million to $168 million, according to the index.

Losing Ground

“The online figures show strength in the very areas where physical stores were weakest last month, strongly suggesting that consumers embraced the multichannel approach in February to meet their buying demands,” Mullin said.

Categories showing the biggest decreases during the month include videos, which dropped from $83 million in January to $52 million in February; office supplies, dropping from $86 million to $69 million; and toys and video games, falling from $126 million to $86 million.

However, if last year is any indication, e-tail sales should climb steadily as the year goes on. After hitting a low of $2.4 billion in February 2000, online sales grew steadily in 2000, peaking at $6.4 billion in November.