Your Business Online | Professional Jeweler

October 17, 2001
A Holiday Surprise
Online shopping may surge this holiday season as shoppers avoid crowded places and travel less

Though retail sales are down and U.S. consumers are nervous, online retailers may not suffer this holiday season. Consumers may turn to the Internet more than ever for shopping this year, but analysts are still unsure of what's to come.

This week, market research companies Forrester Research and Greenfield Online announced online sales in September reached $3.97 billion, only a slight decline from August's sales of $4 billion. Online jewelry sales, according to the companies, increased from $77 million in August to $97.7 million in September. In a separate survey, market researchers Neilson/NetRatings and Harris Interactive found online sales increased 54% in September compared to a year ago, reaching $4.7 billion. While the companies reported different numbers for online sales – they have different research methods – the numbers show e-commerce is experiencing growth despite the recent economic instability. In addition, Neilson/NetRatings and Harris Interactive found 39 million people shopped online in September, the highest number they've recorded.

Many e-commerce analysts predict anywhere from a 10% increase to a 31% increase in online holiday spending this year due to number of factors. For one, the fear of additional attacks may cause consumers to avoid public spaces such as malls. The ability to shop from home or the office may draw more shoppers online. Analysts also say many people will choose not to travel over the holidays and will send online gifts instead. In addition, many economically conscious bargain hunters may find the Internet more desirable because it allows easier comparison shopping.

Not all industry observers are positive about the holiday outlook, however. Many say consumers with tight budgets won't pay extra for shipping and will shop offline at discount stores. To counter this, online retailers may want to consider offering free shipping promotions rather than extensive online sales this holiday season. Also, some assert online stores may suffer if the current anthrax scare makes people nervous about receiving packages in the mail.

What will happen online this holiday season is unclear. If some hunches turn out to be correct, online jewelry retailers – especially those selling all-American jewelry styles – could do quite well.

- by Julia M. Duncan