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From...

Study sees booming holiday sales online

October 13, 1998
Web posted at: 10:00 AM EDT

by Sharon Machlis

(IDG) -- Online retailers should post $3.5 billion to $4 billion in sales during the all-important fourth quarter this year -- a total that may triple last year's tally, according to a survey of more than 100 electronic-commerce sites

Preliminary results of the study, which is to be released next month, were unveiled this week.

Executives at several major Web commerce sites agreed that they anticipate a lucrative holiday season

"We are expecting Christmas to be really large this year ... double to triple," said Steve Hamlin, vice president and general manager at IQVC, the Internet arm of TV shopping channel QVC, Inc. in West Chester, Pa.

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Another online retailer, Onsale, Inc. in Menlo Park, Calif., also expects its November and December sales to double or triple.

Other highlights from the study, conducted by Boston Consulting Group's Toronto office along with the Silver Spring, Md.-based trade association Shop.org, include the following:

  • About 2% of visits to commerce sites result in orders, roughly in line with the average 2% to 3% response rates for direct mail.

  • Commerce sites' revenue is up 103% compared with last year.
  • Online merchandise sales for the first half of this year hit $2.5 billion, and Jupiter Communications, Inc. in New York estimated $2.6 billion in total online sales for all of last year. One reason is that there are more online sites now.

The soaring growth for Internet shopping comes from a small base compared with real-world retailing. For example, Wal-Mart Stores, Inc. posted more than $12 billion in sales for just the five weeks ended Oct. 2.

But the enormous size of brick-and-mortar retailing shouldn't obscure the increasing importance and tremendous growth of online selling, proponents argue. After all, the estimated $80 billion in sales from all paper catalogs is still less than Wal-Mart's annual $90 billion in sales -- yet nobody suggests catalogs aren't a viable sales channel, said Alan Fisher, chief technology officer at Onsale.

"We are very much in the infant stage in electronic commerce," Hamlin agreed.

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