Most Web Users Buying Gifts Online

Some 80 percent of American Internet users say they'll be buying gifts online this holiday season, according to an AOL Shopping/Zogby poll released Tuesday.

The same percentage of Web users, the surveyors found, say they will spend the same amount or more than last year on online gifts.

What's more, 24 percent of netizens expect to spend most of their gift budgets online, the poll revealed.

Time, Selection, Convenience

"These findings clearly show that US Internet users are shopping online more during the holiday season because of convenience, selection and price," AOL Vice President Robert Hayes said in a statement. "The average consumer is starting to see the advantages of online shopping over the traditional brick and mortar store."

When asked why they shop on the Internet, more than half (58 percent) said it saves them time, nearly a third (32 percent) cited the ease of comparison shopping, 29 percent responded they found things online that they couldn't find in stores and 24 percent touted the value of free shipping.

Low on the list of attractions were sales promotions and ease of last minute shopping (17 percent) and gas prices (9 percent).

Big Spending New Yorkers

On average, surveyors discovered that Web users expect to spend US$504.52 online on gifts, or about 40 percent of their holiday spend of $1,282.13.

Those numbers, though, vary significantly by city.

Data from the survey from 20 cities show average New Yorkers spending more ($1,483.36) of their total gift budget ($2,137.26) online than residents of any other American burg.

"I think that's quite surprising, not only because of the size of their budgets, but the amount they were spending online," AOL spokesperson Laura Goldberg told the E-Commerce Times. "People come from all over the country to shop in New York.

"When you think about the New York life style, you understand why," she added. "A lot of it has to do with how busy New Yorkers are. The ease of being able to shop online is highly appealing."

Give Me Hubbub

Some Gothamites, though, still prefer bricks and mortar to electrons. "I like the hubbub of real stores," New Yorker Elizabeth Kaeser, 22, told the E-Commerce Times.

"I do like comparison shopping online for stores that I know and I can be sure about size and quality," she noted.

"If I'm thinking last minute," she added, "I'm thinking about going to the store. Overnight shipping is always too much."

Orlando, Fla., and Cleveland finished second and third among cities with a large Web spend. An average Orlando gift buyer expects to spend $1,991.41 this holiday season, $645.24 of it online; an average Cleveland shopper, $1,238.14, with $577.31 of it online.

Low municipalities on the list were Atlanta, where the average budget was high, $1,996.72, but online spending was low, $397.82, and Sacramento, Calif., where budgets, $821.33, and online spending, $322.32, were both low.

Fastest Growing Segment

Although online sales represents only a small portion of total retail sale in the nation -- about 2.6 percent of some $250 billion -- it is the fastest growing segment in the retail industry, according to William Wetreich, a credit analyst with Standard & Poor's.

"It has been increasing at a mid-20 percent rate since 2001, outpacing the seven percent rate of the overall retail industry," he told the E-Commerce Times.

Online sales during the holiday season and for 2006 should increase 15 to 17 percent, he added.

Jolly Season for Retailers

"All indications are that online shopping this holiday season will be vigorous," Patty Freeman Evans, an analyst with JupiterResearch, told the E-Commerce Times.

Jupiter is predicting an 18 percent year-over-year increase in online shopping.

Evans noted that online retail has become very competitive, so much so that even established players such as Amazon.com (Nasdaq: AMZN) are resorting to "door busters" to drum up site traffic.

"Amazon has never done deep discount promotions before," Evans observed, "but his year they're letting their users vote on a giant discount a week. That's an exciting thing because we've never seen anyone use their customer base to vote on what promotion they'll go forward with."