Ernst & Young’s second annual Internet Shopping study reveals that retailers are hopping on the Internet bandwagon at a record pace in response to the dramatic jump in consumer shopping over the Internet compared with just a year ago.
The percentage of retailing respondents who said their companies were either selling or planning to sell through the Web more than doubled, to 76% from 36% in 1997. And, the number of retailers selling on the Web increased to 39% from 12% in just 12 months.
Still, Web sales represented only about 1% of retailers’ revenue for the most recently concluded fiscal year. However, retailers that sell or plan to sell via the Web projected that Internet revenues would reach 9% of total revenue by the fiscal year 2001.
Aside from sales, retailers placed equal importance on other factors, including attracting new customers, penetrating new markets, promoting the company’s brand and improving customer retention.
“Internet Shopping 1999,” a special report produced by Ernst & Young and sponsored by the National Retail Federation, was released at Bessemer Venture Partners’ E-commerce Summit in Menlo Park, CA, where 20 e-commerce CEO’s gathered to review best practices online.
The study reveals that online shoppers in 1998 have purchased with more frequency and are spending more than they did a year ago. More than half (51%) of online shoppers purchased something online on at least five occasions, up from only 17% a year ago. In addition, more than a third (35%) said they spent $300 or more, up from 26% last year.
The study conducted interviews with more than 1,300 consumers and more than 125 retailers and manufacturers about their current and future Internet buying and selling activities.
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