Study: Net Sales Edged Up in October

E-tail sales rose slightly in October, fueled by big increases in sales of toys, consumer electronics and computers, according to a monthly survey released Monday by the National Retail Federation and Forrester Research.

The figures, along with the results of a weekly tally by Goldman Sachs & Co. and PC Data Online, point to a solid start to the holiday shopping season.

Overall, online sales totaled US$4.4 billion last month, up from $4.2 billion in September, the NRF and Forrester said. More than 16 million households shopped online during the month, spending an average of $268 per person, the survey found.

Goldman Survey Sees Gains

"Online holiday shopping this season is trending well," Goldman Sachs e-tail analyst Anthony Noto wrote in a research note.

The second survey in Goldman's own weekly holiday series, released Tuesday, found that sales in the week ended November 14th were 70 percent above the previous week and 538 percent above the same week last year.

"The survey results indicate consumers are spending more online, and are more satisfied with their online shopping experience, than in '99," Noto wrote.

From Downbeat to Upbeat

The positive news contrasts a study released November 13th by Nielsen//NetRatings, which found that the holiday season was off to a sluggish start in terms of Web site traffic.

Nielsen’s report said that key e-tail sites saw slim increases in visits from the last week in October to the first full week in November. In 1999, the number of shoppers going online during the same period was up dramatically.

Electronics Clearance Sales

According to the NRF/Forrester survey, online sales of consumer electronics surged to $246 million in October from $164 million in September, while computer hardware sales increased to $425 million from $315 million.

NRF vice president of Internet retailing Scott Silverman said the jump could be a result of clearance sales held during the month as merchants make space for new models to be featured during the holiday season.

"We'll be watching this category closely in the next two months to see how consumers use the online channel to purchase these products during the holiday season," Silverman said.

PlayStation Provides Boost

Videos, toys and video games, and videos were also strong performers in the month, according to the NRF. Video sales rose 42 percent during the month to $85 million, while toys and video games improved 29 percent to $203 million, as Sony released its PlayStation 2.

"Some folks waited in line at their local mall" to get the popular new game-player, said Forrester research director David Cooperstein, "while others turned to the Net to get this hot product -- further reinforcing the adoption of the Net as a viable shopping channel."

On the whole, said Goldman Sachs' Noto, the NRF survey results show that "companies' efforts to drive Halloween sales and earlier holiday sales due to the virtual nature of the Internet have had an impact."

No Rally for Stocks

Noto, however, is not looking for a rally in e-commerce stocks anytime soon.

"The shakeup and capital-constrained environment that has characterized 2000 will continue until mid-2001," he wrote. "Only companies with sufficient capital, clear market leadership, scaleable infrastructure and clear profitability profiles will see sustainable price appreciation from a strong holiday season."

The NRF/Forrester Online Retail Index is a monthly barometer of e-tailing activity based on data collected from 5,000 online shoppers during the first nine business days of each month. The October survey was conducted between November 2th and November 10th.

The Goldman Sachs/PC Data Online survey is based on a survey sent to 8,000 online households.