Net shopping returns to normal levels

New research says spending at U.S. sites has surpassed $1 billion for the first time since Sept. 11, though not everything in the study is positive.

3 min read
Online consumers are beginning to set aside their worries and are heading back to the Web to shop for the holidays, a new survey indicates.

Last week marked the first week since the Sept. 11 terrorist attacks that spending at U.S. Web sites surpassed $1 billion, according to a new study by ComScore Networks, a Reston, Va.-based market research company. During the last month, consumers have stepped up their spending on apparel and toys, and travel sales have nearly returned to the level they were at before the attacks, the survey indicates.

"I think we're seeing in part the increasing confidence, comfort and sophistication that people have in buying things online," said Dan Hess, a vice president at ComScore.

Many online businesses saw their sales drop in the wake of the September terrorist attacks. Especially hard hit were online travel companies, some of which saw their bookings drop 60 percent or more.

Even online auction giant eBay was hit. After the attacks, bidding fell, and executives estimate the company lost about $5 million in revenue.

The ComScore report comes amid conflicting projections on this year's holiday spending. Although ComScore rivals such as Nielsen NetRatings and Jupiter Media Metrix have said online shopping will grow significantly this year compared with last year, individual online sites such as Amazon.com and eBay have projected a flat or modest increase in sales.

For the five months prior to Sept. 11, consumers spent an average of almost $1 billion a week at U.S. e-tail and travel sites, according to ComScore. During the week of the attacks, consumers spent just $693 million at such sites--a decline of more than 30 percent.

In recent weeks, spending has started to rebound. During the week ending Nov. 4, for instance, consumer online spending hit $956 million. Last week, spending reached $1.05 billion.

ComScore does not include spending on online auctions such as those on eBay or Yahoo in its totals.

According to ComScore, consumer online spending on travel dropped from an average of $411 million a week during the five months prior to the terrorist attacks to $222 million during the week of the attacks--a decline of 46 percent.

Last week, online travel sales climbed back to $399 million. Hess attributed the resumption of travel sales to consumers' growing ease with travel after the attacks and a pickup in holiday travel purchases.

"I consider it very significant that travel has come up to where it's just 3 percent below the pre-September benchmark," Hess said, adding that online travel seems to have overcome "in large part" the impact of the terrorist attacks.

However, it remains to be seen how Monday's crash of American Airlines Flight 587 will affect online travel sales in the long term. On Monday, online travel sales were down 19 percent compared with the previous Monday.

Online apparel sales reached $105 million per week for the month ended Nov. 11, ComScore said. That is up 19 percent from the five-month rolling average prior to Sept. 11.

"The bellwether of early holiday buying is the pickup in apparel," Hess said.

Another indication of an increase in holiday spending is the increase in spending on toys and video games, he said. Spending on "other, non-travel-related" goods reached $194 million per week in the month ended Nov. 11, according to ComScore. That compares with $185 million a week for the five-month rolling average and $169 million a week for the month of October.

To be sure, not everything was positive in the study. Consumers spent just $11 million a week on computer software in the month ended Nov. 11, compared with $15 million a week for the rolling average prior to Sept. 11. Meanwhile, sales of event tickets, and flowers and gifts were down 24 percent and 43 percent, respectively, from the rolling average.

Hess attributed much of those declines to seasonal issues, noting that event tickets are particularly strong in the summer, and flower and gift companies see the bulk of their sales in the first half of the year, for Mother's Day and Valentine's Day.

ComScore tracks the purchases of 1.5 million worldwide Internet users and projects their shopping activity to the overall base of Internet users. The company began tracking data earlier this year and does not have comparable figures for last year.