WSJ
January 5, 1999
AOL Members Spent $1.2 Billion
Shopping Online During Holidays
By REBECCA QUICK
Staff Reporter of THE WALL STREET JOURNAL
America Online Inc. said its members spent fully $1.2 billion shopping
online during the holiday season -- an average of $80 from each of the
online service's 15 million accounts.
That tally means that AOL subscribers alone spent slightly more than all online shoppers in the 1997 holiday season, when total cybersales
amounted to about $1.1 billion, according to Jupiter Communications, an online-analysis firm based in New York.
In a budding industry that has been reticent to
discuss sales, the disclosure is the latest hard
data to demonstrate that Internet shopping
finally came of age this holiday season. Early returns show electronic
commerce may have more than tripled this holiday season from a year
earlier, and analysts are estimating that online sales will total about $13
billion for all of 1998.
Individual Web merchants are also saying their sales more than tripled this
holiday season. And iQVC, the Internet site of QVC television-shopping
network, for example, estimates annual sales rose sharply to more than
$50 million. QVC is controlled by Comcast Corp.
The fact that online merchants are reporting actual sales figures this year
speaks volumes. "In the past, [merchants] have been secretive when
talking about the actual business value of online shopping," said Michael
Sullivan-Trainor, vice president of Internet research for International Data
Corp., Framingham, Mass. "Today they are boasting about commerce
numbers, in part because they've got something to talk about now."
But while sales are clearly multiplying, they still haven't translated into profit
for many online retailers, even giants such as Amazon.com. And while the
growth figures are impressive, online sales are still only a fraction of overall
retail sales, which totaled $163 billion for the 1997 holiday season.
"What will be interesting to watch is how important AOL is to the online
shopping landscape," said Nicole Vanderbilt, an Internet analyst at Jupiter
Communications, New York.
A year ago, many industry watchers were looking to advertising sales and
subscription fees as key revenue models for Web sites. But "e-commerce"
is starting to take over as the leading model. "Online consumer shopping is
the clear driver of online revenue potential," Ms. Vanderbilt added.
AOL, Dulles, Va., said that in December it hosted 1.25 million first-time
shoppers on its service. That number is significant, analysts say, because
the biggest hurdle to online shopping is getting the consumer used to the
idea of giving out credit-card information over the Internet. After that,
online surfers are likely to make purchases more frequently.
In 1996, the first year AOL began tracking online sales, most consumers
were interested in computing products. Last holiday season, shoppers
turned to apparel. This year, toys were the category most consumers were
interested in buying online, the company said. |
