Online consumers spent $53 billion last year - East Valley Tribune: Business

Online consumers spent $53 billion last year

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Posted: Tuesday, January 20, 2004 9:28 pm | Updated: 5:13 pm, Thu Oct 6, 2011.

U.S. consumers spent nearly $53 billion shopping online last year, industry tracker Jupiter Research said Tuesday.

That’s about 3 percent of the total U.S. retail purchases for the year, excluding cars, travel services and prescription drugs, said Patti Freeman Evans, Jupiter analyst.

By 2008, shoppers will use their computers instead of their cars for about 5 percent of their shopping, Evans predicted.

And the bucks they spend on their Internet purchases will tote up to more than $117 billion.

“Internet will have a more prominent seat at the table,” she said. “Sixty-five percent of online users shop online now. By 2008, 151 million Internet users will be shopping online.”

The increase in online retailing can be a boon for East Valley shoppers, said Tami Ivy, marketing director at Fiesta Mall in Mesa.

“It’s just one more area of competition, and that’s good for the consumer,” Ivy said.

“It will keep brick-and-mortar stores on their toes to provide better customer service and make sure merchandise is in stock and on the shelves. It forces everyone to look at the services they are providing customers and how to make them better.”

Consumers’ increasing use of technology is likely to seep into mall stores, said David Madrid, marketing director at Superstition Springs Center in Mesa.

Some merchants, such as Finish Line and The Gap, already advertise their online sites in their stores, he said.

The next logical step is to put the technology there too, Madrid said, so customers can browse a store in seated comfort and check out only the merchandise they are really interested in.

This is the way many shoppers use the Internet now, he said.

“They look online and come in to touch and feel,” Madrid said. “Many merchants use the Internet to enhance their brick-and-mortar sales.”

Online looking and offline buying is by far the biggest influence of the Internet on retail sales, Evans said.

“Consumers use the online sites as part of their decision making process,” she said. “It’s easy to make comparisons. In 2004, 18 percent of offline purchases will be impacted by online research.”

Evans said that trend is led by teens, who learn to research everything via computers in school. Younger, richer consumers are the biggest online spenders, according to Jupiter’s research.

Affluent consumers — households with incomes of $50,000 or more — make 67 percent of the online retail purchases, Evans said. “The heart of the (online buying) is the 19- to 49-year-old shopper,” she said. “They are 73 percent of the (online shopping) population and make 76 percent of the purchases.”

The early online category favorites — books, CDs, computers — make up 30 percent of the online sales, Evans said. But that trend will shrink as other online purchase categories become more popular, she said.

“The steady growth categories — apparel, footwear, jewelry and home electronics — make up 50 percent of the online sales,” she said.

Categories such as home furnishings and personal care are the smallest but fastest growing for online buying, she said.

The latest trend of online ordering with in-store pick-up, led by such home improvement retailers as Home Depot and Lowe’s, has enhanced both online and offline sales, Evans said.

Last year, 40 percent of Sears online sales were for in-store pickup, she said. And 20 percent of those people bought additional merchandise at Sears when they picked up their online orders.

Groceries, which has been a relative dud for online purchases to date, is likely to pick up on this trend, Evans predicted.

For clothing shopping, basics — jeans and Land’s End-like goods — are much bigger sellers than high-fashion clothing, Evans said.

While it’s difficult to get a handle on online purchasing, the International Council of Shopping Centers pegs online purchasing at a much smaller 1.1 percent percent of total U.S. retail sales in 2002 rather than the 2 percent estimated by Jupiter, said Patrice Duker, spokeswoman for the trade organization. Duker expects that penetration to grow, although probably not as fast as Jupiter predicts. Especially in the clothing category.

“Consumers still want the experience of picking out and trying on their clothes,” she said. Internet shopping will never deal a death blow to malls, she said.

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