The tide of statistics that poured forth from various research firms and trade associations in January told basically the same story: it was a lousy 2002 holiday shopping season for brick-and-mortar retailers, but things were considerably cheerier for their Web-based cousins.
The widely watched eSpending
Report from Harris Interactive, Nielsen//NetRatings and The Goldman Sachs Group Inc. estimated that online spending rose more than 24%, from $11 billion in 2001's holiday shopping season to $13.7 billion in the 2002 period. Including travel, the total was $15.7 billion, up 22% from the year-earlier period, the weekly survey of more than 750 randomly chosen online shoppers says.
New York-based Jupiter Research, meanwhile, estimated that holiday retail sales between Nov. 1 and Dec. 31 would exceed its original forecast of $13.1 billion, which would represent growth of more than 17% over the 2001 holiday period. Jupiter expects to release its final numbers in March.
Conventional retailing got only a lump of coal, turning in an increase in the 1% to 2% range-reportedly the lowest growth rate in about 30 years.
The pundits attributed the tidings of comfort and joy for e-retailers to all manner of factors. Some cited free shipping by retailers, in addition to better technological management that kept busy merchants' Web sites functioning at peak periods.
But the real reason may be simply that with each day, more and more consumers try Web shopping for the first time, and like it. And with each day, more retailers begin selling online. Plus, the retailer survivors of the dot-com shake-out now have five or more years of e-commerce experience.
"Merchants are becoming more comfortable with the Internet as a place to do commerce," says Barry McCarthy, vice president and general manager of VeriSign Inc.'s VeriSign Payment Services, adding that the same is true of consumers.
Mountain View, Calif.-based VeriSign, which provides digital certificates and other services to enhance Internet security, says the more than 80,000 merchants enrolled in its payments services enjoyed a collective increase in excess of 75% in payment transactions in 2002. What's more, the average ticket for VeriSign's top 50 merchants nearly tripled in one year, from $43.91 in December 2001 to $123.85 a year later, according to VeriSign.
"We think that's a clear indication that consumers are increasing their trust levels," says McCarthy.
The conventional wisdom has been that consumers' lack of confidence that their card numbers and other important personal information is secure is the main obstacle to online commerce growth. While Web purchases still account for less than 5% of retail sales, 2002 may go down as the year in which the pendulum unequivocally swung in favor of those who insist the Internet is a safe place for payments.
The most popular e-shopping category in the recent holiday season was books, music and videos/DVDs, with estimated sales of $3.1 billion, according to Harris Interactive (chart). Consumer electronics and toys/video games, however, garnered the highest growth rates.
Authoritative analysis and perspective for every segment of the payments industry
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