Analysts from Jupiter Communications expect consumers to spend $6 billion online during November and December, up from $3.1 billion spent during the same period in 1998.
Of that, $5 billion will be spent on products, $1 billion on travel services. However, according to Jupiter analysts, the $6 billion figure is just a fraction of the future opportunity, as online shopping is expected to grow to $78 billion by 2003.
Retailers’ success depends on establishing positive relationships with new online buyers now to lock in a sizable proportion of future sales.
Jupiter expects that 10 million online users will begin shopping in 1999 and many will make their first purchases during the holiday season. Meeting and exceeding the high expectations of these new online buyers in the fourth quarter of 1999 will have an effect far beyond holiday sales, including securing the wallet share for future online shopping.
Jupiter has termed the ripple effect caused by momentum created the “holiday multiplier.”
“The 1998 holiday season really represented an inflection point in the digital commerce evolution,” said Ken Cassar, an analyst with Jupiter’s Digital Commerce Strategies research practice.
“Several category leaders were able to successfully parlay their strong performance in the fourth quarter of ’98 into strong ’99 performance, and we attribute this to the momentum that online retailers created through positive experiences with online users.”
Many new shoppers will make the leap and buy items online during the holiday season because it is a period when their time to shop is more limited.
“If consumers are satisfied with an online shopping experience that they may have initiated because of time constraints — and have registered their shipping and billing information — they will be far more likely to return and shop after the holidays. Successful holiday transactions will ripple down through the years to come,” said Cassar.
With the buying boom comes a warning, however. A Jupiter consumer survey of more than 2,100 online shoppers fielded immediately after the 1998 holiday season found that the overall level of online shopping satisfaction dropped from 88 percent in the second quarter of 1998 to 74 percent in the fourth quarter.
