ONLINE HOLIDAY RETAIL SALES TO INCREASE 17% THIS YEAR

Jupiter Predictions Emphasize Effectiveness of E-mail for Boosting Demand

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SAN FRANCISCO (AdAge.com) -- Holiday online sales won't be stuffing Santa's sack at quite the furious pace of holidays past, according to a forecast of the holiday shopping season from Jupiter Research.

According to Jupiter's findings, consumers will spend less on a per capita basis this holiday season, and overall online sales will increase at almost half the pace of last year despite a growth in the online population. As the Internet becomes more mainstream, so does the income level of Web shoppers, said Jupiter senior analyst Ken Cassar.

Sales down from 2000-01
Mr. Cassar said overall online retail sales will grow by 17% this holiday season, down from the 30% increase from 2000 to 2001. At the same time, consumers are projected to spend an average of $306 online this season, down from the $313 average of previous years.

The analyst is also advising retailers to "push demand" to get consumers to shop before Nov. 15. "Consumers seem disposed to buy early," he said.

Less shopping days
Online retailers have

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a lot at stake in persuading consumers to buy early. With six less shopping days this year, online retailers need a bigger window to get orders shipped to prevent a logjam come delivery time and a customer-service meltdown when orders are late and irate consumers are phoning and e-mailing to find out what has happened to their holiday gifts.

The analysts found one of the most effective ways of getting consumers to shop early is through e-mails. "This is going to be the year of e-mail marketing," said Jared Blank, senior analyst, noting the price of e-mailing messages continues to drop. In addition, he said the use of HTML in messages gets one to 1.5 times as much response as text messages.

As for online holiday advertising, Juliana Deeks, associate analyst, said 85% of online advertisers have indicated they intend to maintain or increase their online advertising budget, with an average increase of 3% anticipated for holidays.

Convenient shopping
Other Jupiter Research analysts said they expect free and discounted shipping-and-handling charges to be big draws for the holiday, while at the same time consumers may be looking to the Web less for rock-bottom prices but a little more for the convenience of shopping.

The number of retailers leveraging their multichannel approach is growing, the researchers said. Nineteen percent of retailers will allow online shoppers to pick up products at brick-and-mortar stores, the analysts said, up from 12% last year.

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