Posted on: Tuesday, October 1, 2002

Slower gain in online holiday sales is forecast

By Greg Wiles
Bloomberg News Service

NEW YORK — Holiday sales growth will slow on the Internet this year as U.S. shoppers spend $13.1 billion on books, music, clothing, toys and other gifts, according to a Jupiter Research forecast.

Sales will rise by 17 percent from the $11.2 billion in online spending last year, Jupiter analyst Ken Cassar said.

That compares to a rise of about 30 percent in November and December sales a year earlier, he said.

The online sales gains will slow as new Internet-user growth slackens and because of a shorter holiday shopping season this year, Jupiter said. Cassar said there are 19 Internet shopping days after Thanksgiving compared with 25 a year ago.

"The shorter selling season is going to have a negative impact on sales," he said. Most Internet holiday shoppers begin the day after Thanksgiving and stop about eight to 10 days before Christmas because they don't want to pay for expedited shipping, Cassar said.

Comscore Networks Inc., an Internet research company, last month projected a 28 percent increase in fourth-quarter Web sales based on growth rates this year. Amazon.com Inc., the largest Internet retailer, is expected to have a 12 percent rise in fourth-quarter sales, to $1.25 billion.

Regular retailers are also preparing for slower holiday sales this year. The National Retail Federation, the largest U.S. retail trade group, estimates total sales will rise 4 percent in November and December, compared with a 5.6 percent increase in 2001.

Jupiter Research also estimated holiday online advertising will increase by 3 percent from last year.