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Forrester Maintains $11B Estimate for Holiday E-tail

By Keith Regan
Oct 17, 2001 9:16 PM PT

Forrester Research (Nasdaq: FORR) said Tuesday it will stick by its prediction that U.S. consumers will spend US$11 billion online this holiday season.

Forrester Maintains $11B Estimate for Holiday E-tail

Forrester said the estimate, which calls for a 10 percent increase over 2000 online holiday spending, was revisited in the wake of the September 11th terrorist attacks on the U.S. and the military action in Afghanistan.

Forrester estimated September online sales at $3.97 billion, a slight drop from $4 billion spent in August.

"When you think of all that went on during September, it's amazing that the decline was as slight as it was," Forrester analyst Christopher Kelley told the E-Commerce Times. "It really shows the resiliency of e-commerce in uncertain economic and social times."

In a report also released Tuesday, Nielsen//NetRatings and Harris Interactive pegged September sales at $4.7 billion, down from $5.5 billion in August.

Resilient Shoppers

Forrester said the September 11th attacks did not stall online sales as much as feared, estimating that $96 million was spent online between the morning of the attacks and the next evening.

However, while the number of shoppers grew from 14.8 million in August to 15.1 million in September, according to Forrester, the average online consumer spent less -- $262 in September, compared with $273 the month before.

Both studies released Tuesday noted sharp drops in travel spending -- which Kelley said he expects to rebound by the end of the year -- but strong gains in apparel and other categories.

In fact, some of the fallout from September 11th might actually help other areas of online shopping, Cambridge, Massachusetts-based Forrester said. For instance, Forrester expects consumers worried about traveling by air to send gifts bought online to distant family members.

Online Boost?

Further, many of the millions of Americans who had never before bought online, but turned to the Web to donate money to various attack aid funds, will come back to buy.

Six million new households will start buying online this year, Forrester estimates.

"You had such a monumental outpouring of support and the thing that got many people over that e-commerce barrier was how easy sites made it for them to donate," Kelley said.

Many sites posted clear messages explaining why credit card donations would be secure, Kelley added, noting "that's the kind of message that gets people into the comfort zone where they can spend."

Taking Steps

Still, Forrester said online businesses should take steps to ensure they can capitalize on the surge of interest in buying on the Web.

Retailers should offer shoppers the ability to split orders (sending gifts to more than address from a single purchase), offer in-store pickup whenever possible, and launch promotional campaigns early in the holiday season, the firm said.

Kelley also urged online retailers to think long-term. New customers can be turned into repeat customers if sites provide easy navigation and smooth checkout, as well as easily located and understood privacy, security and shipping policies -- just as they did when they posted donation links.

Anthrax Downplayed

Finally, while the U.S. watches and worries as the number of both actual and false alarms of anthrax exposure increases, Kelley said he does not expect growing concerns about the safety of packages received in the mail to derail online shopping.

"You may see people calling their aunt to tell them that a package from L.L. Bean or Lands' End is on the way, which they might not have done before," Kelley said. "But I don't think it's enough to keep people from sending that gift."


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