sealPurdue News

December 2000

Is Santa getting good little boys, girls their toys online?

WEST LAFAYETTE, Ind. – The amount of Christmas shopping consumers will do online this holiday season will triple from last year's $2 billion to more than $6 billion, according to the Purdue University Retail Institute's annual retail holiday spending forecast.

The tripling of online sales this holiday season only seems to overshadow the overall increase of 3 percent to 6 percent in total national holiday retail sales forecast, says institute researcher Richard A. Feinberg, professor of consumer sciences and retailing.

"But the amount spent on the Web is still only 2 percent of total retail sales," Feinberg says. "And because of very modest retail sales increases in the last year, to maintain their growth and profitability, retailers must fight for every dollar consumers spend.

"The real winners now and in the future will be those retailers who allow their customers multi-channel access, so they can buy anytime, anywhere and anyhow they want – in a store, from a catalog or on the Internet."

Other e-retail facts in the forecast:

– The most popular items people will buy online remain compact discs, videotapes, books, clothing, toys and games, and gift certificates. An increase in September apparel sales suggests strong holiday clothing sales.

– Fifty percent of e-retail customers this year will be women. As recently as 1998, men made 61 percent of online purchases.

– First-time customers will make 10 percent of online holiday purchases this year.

– Most Internet sales take place during the second week in December, making it difficult for e-retailers to make delivery promises. This cuts off e-retailers' access to the 30 percent of shopping that takes place the last week before Christmas.

– Last year's top e-retail Web sites (according to Ernst & Young, the Big Five accounting and business consulting firm):

Web Site Average
JC Penney$151
Toys "R" Us$134


Some retailers hope for a merr-'e' little Christmas

WEST LAFAYETTE, Ind. – After a generally dismal showing last year, e-retailers have something to prove to skeptical consumers this holiday shopping season, according to the Purdue University Retail Institute's annual retail holiday spending forecast.

"Last year, ran out of some popular items, and Toys R Us had delivery problems," says Richard A. Feinberg of the Purdue Retail Institute. "Fully 50 percent of all consumers wait until the week before Christmas to do their shopping, so customer shopping patterns work against e-retailers. Because items bought from Web sites must be shipped, e-retailers are shut out of the last-minute sales."

E-retailers are responding by attempting to get customers to shop earlier, Feinberg says. In turn, stores and catalog retailers are putting up Christmas decorations earlier and offering sales and incentives.

"The Christmas season that traditionally began at Thanksgiving now begins in early October as stores, catalog retailers and e-retailers compete for consumers' attention," he says.

Informal surveys show that e-retailers have put millions of dollars into getting people to shop early by stressing lower prices online and less shopping hassle, Feinberg says. But the e-retailers have to deliver this year, or many won't be around when Christmas 2001 comes around.

"The customer doesn't care why an item isn't in stock or about the e-retailers' delivery problems," Feinberg says. "Customers want guarantees that items they order will get there prior to Christmas. After all, customers can choose to go to retail stores the day before gifts need to be delivered."

This is a high-stakes game for retailers of every stripe, Feinberg says. "Holiday sales represent 50 percent of retailers' annual sales and 50 percent to 75 percent of yearly profits." E-retailers didn't turn a profit last year even though they sold $2 billion worth of merchandise.

"This is a make-or-break year, especially for smaller e-retailers that must cut through Internet clutter, compete with new e-retailers as well as the larger, established brick-and-mortar stores who are taking their merchandise online," Feinberg says.

Source: Richard Feinberg, (765) 494-8301, e-mail:

Writer: J. Michael Lillich, (765) 494-2077,

Purdue News Service: (765) 494-2096;

Journalists:   This is part of two releases on the holiday sales forecast report. The other release is available online or by contacting Mike Lillich, University News Service, 1132 Engineering Administration Building, Room 324, West Lafayette, IN 47907. Phone: (765) 494-2077; e-mail:

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