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JUPITER COMMUNICATIONS/ Holiday online sales hit $2.3 billion, but gift opportunity still untapped
November 5, 1998
NEW YORK, M2 PRESSWIRE via NewsEdge Corporation : * Commerce players can upsell "self-buyers" into "gift buyers"
Shoppers are expected to spend $2.3 billion online during the 1998 holiday shopping season, up from $1.1 billion in 1997, according to research released today by Jupiter Communications to its Strategic Planning Services (SPS) clients. Only 16 percent of online purchases are gift-related, representing a large untapped revenue stream.
While holiday sales will bring new customers, online retailers must view this boom season as an opportunity to increase the value of each existing customer by encouraging "self-buyers" to also become "gift-buyers." A total of 11 percent of online buyers reported that the majority of their online purchases were gift- related. However only 59 percent of online buyers report that fewer than 10 percent of their online purchases are currently gift-related.
Nicole Vanderbilt, group director of Jupiter's Digital Commerce Strategies research practice, explained that as the online shopping market matures, commerce players will move from an acquisition strategy to a retention strategy. Commerce players should therefore use the gift-buying market as a way to increase their share of online buyers' wallets. "While online retailers have been successful in capturing dollars that consumers spend on themselves, they have been unsuccessful in getting the majority of those same customers to spend their gift dollars online," added Vanderbilt.
Jupiter believes that commerce players should develop features such as gift registries that leverage customer databases to maximize lifetime value of their customers. By allowing designated gift buyers to access information about gift recipients, such as preferences and wish lists, commerce players will be well- positioned to capture online buyers' gift dollars. "By providing an attractive service that is unavailable in other channels, retailers are able to both encourage incremental online spending and continue to develop their own all- important customer profiles," said Vanderbilt.
Jupiter Communications is a new media research firm that helps companies make intelligent business decisions about consumer interactivity. Focused exclusively on how the Internet and other technologies are changing traditional consumer industries, Jupiter's Strategic Planning Services (SPS) deliver a continuous flow of analysis, primary data, and market projections. SPS offers companies investing in new technologies a framework for realizing return on investment, both for new lines of business in mainstream media, entertainment, commerce, and marketing, as well as for Internet- and technology-based start-ups. Jupiter also produces industry seminars and book-length research studies. Jupiter Communications, LLC, established in 1986, is an independent, privately held company with offices in New York City and London, England.
<<M2 PRESSWIRE -- 11/03/98>>
CONTACT: Diane Schreiber, Jupiter Communications
Tel: +1 212-780-6060 x 208
Fax: +1 212-780-6075
e-mail: dianes@jup.com
WWW: jup.com
[Copyright 1998, M2 Communications]
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