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Published: Friday, January 1, 1999
Online retailers see triple-digit sales increases
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JAMES ROMENESKO STAFF WRITER
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Online retailers got a surprise gift this holiday season: revenues that exceeded even the most optimistic predictions.
Most industry observers had expected online shopping revenue to double in 1998 over the previous year, but a Boston Consulting Group/shop.org survey of major retailers indicates they saw a 230 percent jump during the holiday.
A Boston Consulting analyst estimated that retailers took in about $2 to $3 billion from online purchases during the holiday season.
Minnetonka-based Fingerhut Cos. reported that December sales at fingerhut.com and andysgarage.com were up 424 percent over the previous December. There was an even greater spike in November, said spokeswoman Lynda Nordeen, with a 575 percent increase in online sales over the previous year at fingerhut.com.
''What we found was there was less fear this year about using credit cards online,'' said Nordeen.
Best Buy will release its holiday sales figures on Wednesday, but spokeswoman Joy Harris said online purchases set records for that retailer, too.
''Our DVD sales on the Internet were surprisingly strong, and even more so than what we expected,'' said Harris.
The chain sold more DVD products online than in the brick-and-mortar stores, she said.
Although she wouldn't comment on holiday sales trends, Lands' End spokeswoman Anna Schryber said the mail-order company had record online traffic on December 9, and that had to add hardware to handle the rush of virtual shoppers.
''Forty percent of our business (for the year) takes place during the holiday season,'' she said.
Schryber noted that the Dodgeville, Wis.-based company saw a significant online demographic shift in November and December of 1998.
''Up until last fall, men's products were selling two to one over women's, but now we're selling more women's products,'' she said. ''That tells us that more women are shopping online.''
Colleen Christensen, a secretary at the Charles Babbage Institute on the University of Minnesota campus, said she bought books online at Amazon.com for holiday gifts, but still did much of her shopping at stores because of the browsing ease.
''The Web is great if you know what you're looking for, but I enjoy browsing for little gifts,'' said Christensen.
Like many shoppers, she has shaken off any fears of sending credit card information over the Internet.
''I figure it's as safe, or maybe safer, than giving it over the phone,'' Christensen said.
Bill Bass, an Internet analyst for the Cambridge, Mass.-based Forrester Research, Inc., said his firm is predicting that online shopping will continue to grow by leaps and bounds in 1999.
' It's going to reshape the landscape, and when the final numbers come out for 1998's holiday online shopping, it's going to be a stunningly large amount,'' said Bass.
The Boston Consulting Group survey reported the average online order was $55, up 6 percent over the previous season.
Although there is a proliferation of retailers selling online, revenues are still concentrated in only a few major sites, according to the firm. It said the 10 largest sites account for 50 percent of revenues.
While more consumers are shopping online, the revenues are still relatively small, reflecting only 1 percent to 3 percent of total retail sales, according to analysts.
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