Online Holiday Shopping Season 2004 Hits $23.2 Billion

The latest holiday eSpending Report from Goldman, Sachs & Co., Harris Interactive, and Nielsen//NetRatings revealed that online shoppers in the U.S. spent $23.2 billion during the 2004 holiday season, excluding travel. This reflects a 25 percent increase from the $18.5 billion spent online during the same timeframe in 2003.

According to the 2004 eSpending report, based on weekly surveys of more than 1,000 respondents, online consumers spent the most on apparel/clothing, totaling $3.8 billion, or 16 percent of total online revenue, during the 2004 holiday season (see Table 1). The toys/video games category was second with $2.5 billion, or 11 percent of online revenue, while the consumer electronics category rounded out the top three with $2.3 billion, or 10 percent of total online revenue.

Categories generating the highest year-over-year growth in holiday dollars included jewelry, flowers and computer hardware/peripherals. Jewelry jumped 113 percent to $1.9 billion during the 2004 holiday season compared to the $888 million spent in 2003 (see Table 2). Floral retailers experienced a 59 percent surge in online revenue to $530 million while computer hardware/peripherals increased 30 percent over last season, generating $2.1 billion in online revenue this year.

   Table 1: Online Shopping Categories Ranked by Total Online Revenue, 2004
            Holiday Season

  Category                             % of Total         2004 Projected
                                       Online Revenue     Online Revenue
                                                           in Millions
  Apparel/Clothing                          16 %              $3,775
  Toys/Video Games (hardware and
   software)                                11 %              $2,528
  Consumer Electronics                      10 %              $2,306

  Source: Goldman Sachs, Harris Interactive, and Nielsen//NetRatings
          eSpending Report, 2004
  * Number of respondents: More than 1,000 online U.S. adult consumers
    surveyed weekly (Weeks 1-8: n=9,077)
  * The Holiday eSpending Report defines November 1 to December 26, 2004 as
    the 2004 Holiday Season.

   Table 2: Fastest-Growing Categories Year-over-Year, 2004 Holiday Season


  Category                     2004 Online   2003 Revenue     2004/2003
                               Revenue in    in Millions       % Growth
                               Millions
  Jewelry                        $1,888          $888            113 %
  Flowers                          $530          $333             59 %
  Computer Hardware/Peripherals  $2,144        $1,650             30 %

  Source: Goldman Sachs, Harris Interactive, and Nielsen//NetRatings
          eSpending Report, 2004
  * Number of respondents: More than 1,000 online U.S. adult consumers
    surveyed weekly (Weeks 1-8: n=9,077)
  * The Holiday eSpending Report defines November 1 to December 26, 2004 as
    the 2004 Holiday Season.

“Online shopping contributed significantly to overall 2004 holiday sales by attracting consumers through a broad product selection,” said Heather Dougherty, senior Retail analyst, Nielsen//NetRatings. “Consumers have become accustomed to purchasing online over the years and look to the Internet to find comprehensive product information, competitive prices and easy gift delivery allowing them to have more time to spend on other holiday activities.”

Wider Product Selection Drives 2004 Online Shopping

The 2004 eSpending report showed that overall the majority of online consumers were satisfied with this season’s Web shopping experience: 37 percent were very satisfied and 24 percent were somewhat satisfied. In addition, 30 percent of respondents felt this year’s online shopping was better than last year.

Several factors contributed to the success of online shopping in the 2004 holiday season. Similar to last year, the 2004 eSpending report indicated that 36 percent of respondents cited a preference to avoid crowds as the top reason to buy online rather than visit a store. Thirty-six percent also cited finding a lower price online was the reason they took to online shopping, while a wide product selection rounded out the top three reasons with 33 percent.