A Merry Online Christmas

A new forecast predicts that the 2000 holiday season will result in about $11.5 billion worth of online sales, a 66 percent increase over the business done by e-tailers in 1999. (Of that total, $2.6 billion are expected to be travel-related.) The report, from Jupiter Communications, should be welcome news to online retailers, who saw holiday sales zoom a year ago to $7 billion, which was a 126 percent leap over 1998. But that performance was expected to trigger a year-long e-tail revolution. Instead, sales leveled off disappointingly, and many e-commerce companies were driven out of business.

A big problem with the expected revolution is that many of those on-line sales produced consumer disappointment, especially when so many purchased products were unavailable to be shipped. “This year,” said Jupiter senior analyst Ken Cassar, “the manufacturers are beginning to become committed to the sale of their products online.” The report said that companies selling luxury goods should see the biggest increase in sales. It was those products that suffered most from lack of supply a year ago.

Jupiter forecasts that there will be 48 million people shopping online by the end of 2000, and 6 million of them will make their first purchase during this year's holiday season. At the end of 1999, 32 million people had shopped online.