Online Sales: Comparing Annual and Holiday Trends

Several studies are now available that provide data on consumer online sales for 1999. PC Data Online and Goldman Sachs have also collected data on a weekly basis during the past holiday season. The distribution of e-commerce sales among categories is of great interest, for instance, to shopping center owners and store-based retailers, who need to know which products consumers are purchasing online. It is also instructive to compare this distribution in the holiday season to the distribution over the year as a whole. Specifically, how do Internet sales during the holidays parallel or contrast with those for the full year? Which categories are especially strong in these time frames? Are there any implications in these data for malls?

Table 1 (below) shows estimates for distribution of consumer online sales for 1999 as a whole. Data are based on the eRetail Report, issued by eMarketer (www.emarketer.com), an Internet research firm. Travel — defined as airfare, hotel accommodations, car rentals and packaged tours — contained the largest percentage of sales with approximately 32%. In second place was computer hardware and software, at 31%—not surprising, given that many online users are very likely not only knowledgeable about hardware and software but also comfortable with purchasing them online. The next significant category is books, at 9%, followed by a cluster of categories further back: gifts/flowers (4%), music and apparel (each with 3%), and entertainment and food (each with 2%).

One last category bears mentioning: “other,” which constitutes approximately 14%. This umbrella category covers a variety of merchandise, none of which comprises more than 2% of the overall total. (Toys, for instance, make up only 1% of the yearly number.)

Table 2 (below) illustrates category performance of Internet retailers for last year’s holiday season. The data are derived from weekly interviews with a sample of approximately 3,000 at-home Internet users conducted by PC Data Online and Goldman Sachs.

One obvious difference between the yearly and holiday results lies in the travel category, which during the holidays accounts for only about 12% of total consumer online sales. Possibly the decline from the yearly sales results from travel-related purchases made closer to the summer, which is the height of the travel and tourism season.

Equally significant is the rise of the toys category. From a relatively minuscule proportion of annual sales, this category came to comprise about 13% of consumer online sales during the 1999 holidays. Music, apparel and entertainment (which includes video and DVD — no hardware) also gained a larger portion of overall consumer online sales during the two-month period, though their growth was not quite as dramatic.

Some caution should be exercised in analyzing the results of these surveys because of variations resulting from differing measurements and methodologies. Nevertheless, these data lend themselves to the following observations:

Technophiles may have a natural affinity for buying online and doing so throughout the year, as indicated by the fact that the computer category’s share of e-commerce sales did not decline significantly from the yearly to the holiday results for 1999.

Consumers may feel more comfortable in buying products online that are “commodities” — e.g., computers, toys, books and music. They seem to show continuing resistance to buying merchandise that appeals to the senses and lends itself more to a tactile than a virtual environment, such as apparel and food.

Currently, mall tenant categories would not appear to be heavily exposed to online competition. During the 1990s, malls have increased the proportion of tenant mix allotted to the so-called GAFO categories — department store-type merchandise such as General merchandise, Apparel, Furniture/home furnishings, and similar types of items — while reducing space devoted to computers, toys, books, and music.

This article was written by Michael Tubridy of ICSC Research. For further information, please contact him at (646) 728-3671.

E-commerce, Spring 2000 index