Will Consumers Surf Their Way Toward Holiday Gift Buying?

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With the Thanksgiving holiday approaching -- and the starting gun for the holiday season poised to fire -- many consumers appear ready to turn to the Internet for gift buying.

A recent survey for the Business Software Alliance (BSA) showed that 71 percent of Internet users plan to conduct at least some of their holiday shopping online. This year, 64 percent said that compared to two years ago they are more likely to shop online. It's estimated that 62 million consumers will make online holiday purchases in 2002, as reported by the Wall Street Journal.

Booksellers could take heart in the BSA survey's finding that 65 percent of Internet users said that they would purchase books/videos, which topped the list. Following books/videos were music CDs (53 percent), clothing/accessories (46 percent), and computer hardware/software (35 percent).

A search for convenience, service, and value appear to be playing a role in the trends toward online shopping. A pre-holiday survey conducted by the consulting firm Deloitte & Touche found that the convenience and service of online shopping yielded greater customer satisfaction than shopping in bricks-and-mortar stores. While 73 percent rated Internet shopping on a scale of one to 10 as eight or better, only 41 percent rated bricks-and-mortar shopping an eight or better. [For more on pre-holiday surveys, click here.]

Consumers, however, do have concerns regarding online shopping. The BSA survey found that online security and fraud are substantial worries. Two out of three Internet users are apprehensive that their personal information will be sold to a third party, and 65 percent worry about having their information stolen from Web merchant databases. Just under half are concerned they will receive unwanted e-mails following their purchases, and over a third worry about transmitting their credit card numbers.

Recent figures from the U.S. Commerce Department support the pre-holiday surveys. In October, the sales of "nonstore retailers" rose 1.4 percent over the previous year, and nonstore sales are up at a 5.8 percent annual rate in the three months ended October 2002, compared with a 9 percent decline in the three months ended October 2001. The Commerce Department classifies nonstore sales as including both online and catalog sales.

In the second quarter of 2002, the Commerce Department estimated that Internet sales averaged $3.4 billion per month, about 26 percent of the $13.3 billion in nonstore sales. However, Internet sales grew much more quickly -- about 24 percent on a year-over-year basis, compared with approximately a 2 percent rate for nonstore sales as a whole, as reported by the Wall Street Journal. -- Dan Cullen