Online holiday shopping gets off to a slow start

A new Nielsen/NetRatings survey, released Monday, found that e-commerce activity was mostly flat during the first week of November, an early indication that sales may be weaker over the next two months than anticipated--or at least have yet to begin.

For the week ended Nov. 5, sales stalled at zero percent growth from the week ended Oct. 29, according to the study, which measures visits to representative e-commerce sites by Internet users at home and at work.

The hesitancy compares poorly with the surge in traffic registered by e-tailers during the first week of November last year, when consumers began their holiday shopping online, according to the Nielsen/NetRatings Holiday E-Commerce Index. This year, many individual e-tailing sites showed flat or modest gains in unique visitors.

The survey flies in the face of expectations for a strong holiday season. A report by Jupiter Media Metrix, also released Monday, estimates that 6.3 million U.S. consumers this year will spend more than 50 percent of their holiday budget online--a dramatic increase from 1999, when 1.6 million consumers spent the majority of their holiday budget shopping on the Web.

Jupiter Media Metrix also projects that 35 million people in the United States will purchase gifts online this holiday season, compared with 20 million who shopped online last year. Consumer spending online is expected to rise from $7 billion during December of last year to $11.6 billion during the same period this year.

Toys and games, one of the categories pegged for hot growth this holiday season, remained flat during the first week of November 2000 compared with the last week of October, after having jumped 47 percent in unique visitors from home computers in the same period last year, according to the Nielsen/NetRatings study. Computer hardware sites dipped 7 percent this year, compared with a 19 percent growth in traffic last year. The consumer electronics category last year showed a 56 percent rise in unique visitors from home, but this year rose a more modest 16 percent.

The NetRatings survey also compared home traffic at selected e-commerce sites. For example, Best Buy kicked off the start of the holiday season last year with traffic soaring 128 percent from the last week of October to the first week of November, but rose just 21 percent this year. Etoys.com jumped 55 percent in 1999 but increased only 7 percent in 2000. Gap.com grew 34 percent last year but fell nearly 10 percent this year.

"Last year was the first consumer holiday shopping season on the Web where many e-commerce sites skyrocketed in traffic as they established themselves online for the first time," Sean Kaldor, vice president of eCommerce at NetRatings, said in a statement.

"As we've seen, many were weeded out," Kaldor said. "This year proves to be a tougher environment with an Internet matured. The next two weeks will be crucial for e-tailers to drive up traffic if they are banking on a big holiday season and they want to hit their revenue marks."