NEW YORk (CNNfn) - Online sales this holiday season are expected to reach $6 billion, more than double last year's total, according to a report released Tuesday by a research firm specializing in the Internet and digital economy.
New York-based Jupiter Communications also predicts that fewer Web sites will break down this year as companies beef up their server computers to handle the anticipated spike in online traffic.
"Last year, nearly everyone was surprised at how much demand there was," Ken Cassar, a Jupiter analyst, told CNNfn. "This year, people realize how much demand and potential there is. We won't see as many people caught off guard."
Jupiter estimates that about 10 million people will shop online for the first time this year, many of them during the holiday season. That is expected to increase the total for the year to 28.8 million, 53 percent higher than last year, Jupiter said.
The spill-over from the holiday season is one key to survival for online retailers. Last year, nearly all online retailers experienced higher sales in the first quarter of 1999 than in the third quarter of 1998.
"Holiday '99 will force a shake-out about who can and who can't stand alone," said Michael May, a digital commerce strategies analyst with Jupiter.
However, a looming question is whether Web-based vendors can surmount the customer satisfaction hurdle that has plagued them in recent months. Managing traffic surges is going to be one of the top priorities.
Consumer satisfaction in their online shopping experience fell to 61 percent in July, down from 74 percent in January and 88 percent in July 1998.
Cyberspace shopping appears to have turned a corner from being a preserve of computer-savvy Web surfers, Jupiter found. "The online consumer is becoming ? more of a mirror, or cross-section, of the public at large," May said |
