Wednesday, January 3, 2001

Holiday Online Shopping Lags in Final Week

Online buying expectedly dropped during the week leading up to Christmas, as home Internet users spent an estimated $1.04 billion, a new study from Goldman Sachs / PC Data disclosed today.

Consumer online spending dropped $540 million from the Holiday season’s peak of $1.6 billion during the prior week. The latest weekly figures (for the week ending Dec. 24th) bring the to-date Holiday spending since the first week of November to $9.8 billion. This is more than twice the $4.7 billion that consumers spent online during the comparable time period in 1999.

"Despite disappointing reports from some Internet online retailers, online spending growth was healthy during the Holidays," said Cameron Meierhoefer, Internet analyst for PC Data. "While many Internet retailers enjoyed a strong Holiday season, this may have come at the expense of other pure-play e-tailers who needed to exceed expectations this year."

"While it appears that online Holiday sales this year will be solid and within our estimated range, veteran e-Commerce companies should be the primary beneficiaries as they continue to garner market share from smaller, less-established companies," said Anthony Noto, Goldman Sachs Internet analyst.

Electronics led all categories in spending for the first time during the Holiday season as online users spent over $118 million for last minute purchases.

Overall, survey respondents were pleased with online shopping this season. Among those who bought last year, 94 percent said the experience was the same or better than in 1999.

Leaders in Charge to Sell Auto Insurance on the Web
Aggregators in the United States and Europe are leading the charge to sell auto and other insurance over the Internet, but only a few of these sites will survive, says a report, just released by Meridien Research, which focuses on the aggregators in the online insurance space. Since aggregators earn one-time commissions on new sales, the winners will need a full range of insurance products and the ability to both compare products and close sales online instead of just providing price quotes.

The report, “Auto Insurance Aggregators: The On-Ramp to the Internet,” provides the first in-depth look at aggregators and covers the global landscape of online auto insurance.

“The insurance industry has traditionally been a very conservative industry. Banks and brokerage firms have raced to the Internet to aid their clients but in general insurers have lagged behind. Today, however they are realizing that this channel cannot be ignored and are investing in the technology needed. As this happens and customers become more confident in making purchases over the Web we are likely to see online sales comprising a greater portion of insurance revenues,” said Dave Potterton, Meridien’s research director for e-Financial Services.

The Web is an ideal sales vehicle for auto insurance because it’s more cost-effective than traditional sales channels and provides consumers with convenience and savings. But just how fast the online sales will grow is hard to forecast since consumer acceptance in this area has been difficult to predict, Meridien said.

About 1 percent of personal insurance policies in the U.S. are bought over the Internet today, with auto policies the most popular. Because auto insurance is a standardized product and a less emotional buy than homeowners, health or life insurance, consumers are less likely to depend on an agent. Consumers have an incentive to shop online because premiums can vary greatly among insurers.