Forrester: Holiday Purchases Contribute To $3.5 Billion In On-line Retail Sales In Q4
Cambridge, Mass., November 17, 1998 . . . Consumers will establish a new ceiling for on-line retail sales this quarter, making $3.5 billion in purchases via the Internet by the end of the year, according to new projections from Forrester Research, Inc. (Nasdaq: FORR). Forrester expects consumers to turn to the Web in record numbers to fulfill their holiday gift-giving needs.
Maria LaTour Kadison, senior analyst in Forrester's On-line Retail Strategies service, said that tough competition among retailers combined with aggressive advertising in traditional media by e-retailers will attract consumers looking for prices, products, and convenience. Forrester expects a significant number of consumers to make their first on-line purchases this holiday season, making 1998 a pivotal year in the evolution of eCommerce.
"Holiday shoppers traditionally face long lines, crowded aisles, absent or unhelpful sales clerks, and uncertain availability," said Kadison. "The Web offers the ability to find the best prices and multiple delivery options without the hassle of shopping in malls and stores. In a way, the Web restores some of the holiday gift-buying experience."
Three trends will emerge from the 1998 holiday buying season:
Major retailers like eToys, Gap, and L.L. Bean will leverage their brands to capture loyal customers on-line. To make gift shopping easier, these retailers will offer gift searches based on the recipient's age and gender, as well as the giver's price range.
The leading portals will offer holiday shopping channels that aggregate vertical retailers and gift sites, making it easier for on-line shoppers to find gift ideas and place orders.
Dedicated gift sites like 911gifts.com and eGift.com will attract shoppers who need help or guidance with advisory services and searches by occasion, recipient, type of gift, and price range.
Converted holiday shoppers will continue buying on-line in 1999, as e-retailers look for new ways to capture consumers and spread sales throughout the year. Forrester expects increased use of e-mail reminders and gift-of-the-month services to lure consumers back to the Web for post-holiday purchases. Meanwhile, portals will focus on improving their retail services, offering one-cart shopping that enables consumers to use one cart and make one payment while shopping at multiple affiliated retailers. Successful gift sites will become acquisition targets for both large retailers and portals seeking targeted customer services.
"Last year, on-line retailers did not experience the traditional post-holiday drop-off in sales," Kadison added. "Forrester expects to see a similar ratchet effect again this year as consumers keep coming back to the Web for more and more purchases in 1999."
Forrester Research, Inc., is a leading independent research firm offering products and services that help its clients assess the effects of technology on their businesses. Forrester provides analysis and insight into a broad range of technology areas such as new media, computing, software, networking, telecommunications, and the Internet, and it projects how technology trends will affect businesses, consumers, and society. Forrester's European Research Center, located in Amsterdam, Netherlands, brings the company's unique perspective to new media developments in Europe.
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