Net holiday shoppers want bricks with their clicks

Unnerved by dot-com shutdowns, customers are expected to shop more at online retailers with brick-and-mortar origins than at pure-play Internet sites, new research finds.

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Unnerved by dot-com shutdowns, customers this holiday season are expected to shop more at online retailers with brick-and-mortar origins than at pure-play Internet sites.

In a report released Monday, Jupiter Media Metrix said this trend would be a reversal from last year, when 55 percent of online consumers shopped at pure-play Internet sites, compared with 45 percent who shopped at sites connected to brick-and-mortar stores.

"I believe that most online consumers are aware of the volatility in the channel; they know that a lot of sites have shut down, and that will drive them to the more established sites," said Ken Cassar, a retail analyst with Jupiter.

Pure-play e-commerce sites such as Amazon.com, CDNow and SmarterKids.com are expected to spend less money on advertising this year as jittery investors put on the pressure for profitability. This decreased advertising budget, Cassar said, could cause pure-play sites to lose some market share.

Consumers new to online shopping tend to be less Internet-savvy and more comfortable with Web sites connected to brick-and-mortar stores.

These shoppers have an increasing number of Web sites to visit. Brick-and-mortar stores that have opened Web sites over the past year include Circuit City, Best Buy, Fry's Electronics and Williams Sonoma.

"It's bad news for pure plays as a group, but for each of the pure plays individually that still survive, we believe that in terms of revenue they'll have a solid season," Cassar said. "Of course, the big unknown is if they will be able to move toward profitability."

Although shopping destinations may be chosen more carefully this holiday season, the online e-commerce market as a whole stands to make considerable gains.

Jupiter estimates that a total of 35 million people in the United States will purchase gifts online this holiday season, compared with the 20 million who shopped online last year. This will likely translate into $11.6 billion being spent this season, compared with $7 billion during the same period last year.

Jupiter also expects 6.3 million Americans to spend more than 50 percent of their holiday budget online, an almost 300 percent increase from the 1.6 million people who fell into this category last year.

Holiday e-commerce report
More shoppers are also expected to buy clothes and shoes online this year, in addition to safer online purchases such as books, CDs and computer gear.

"This shows that consumers are becoming increasingly comfortable with the channel," Cassar said. "They're willing to buy products that are typically considered to be risky because of the fit issue and the tactical nature."

With Christmas still 42 days away, online retail sites are already getting more visits from consumers than they did during the busy December month last year. Twelve-month audience ratings from Media Metrix, which completed its merger with Jupiter in September, suggest that as many people visited retail sites in August 2000 as they did in December 1999.