Thursday, March 29, 2001

Consumers Spent $3.4 Billion Online In February

The National Retail Federation (NRF) and Forrester Research, Inc., in conjunction with Greenfield Online, today announced the results of the latest NRF/Forrester Online Retail Index. According to the 14th survey in this monthly series, total spending on online sales increased from $3 billion in January to $3.4 billion in February. The number of households online also increased to 13.5 million in February, from 13.3 million in January. Consumers spent an average of $248 per person in February, compared with $229 in January.

Appliances experienced the largest increase, growing from $24 million in January to $44 million in February. Jewelry and flowers also rose collectively by nearly 40% -- from $99 million in total in January to more than $166 million in February. Online furniture sales also increased significantly -- from $26 million in January to $43 million in February. Among the categories that experienced a decrease in online sales include videos, office supplies, and toys and videogames. Video sales fell to $52 million in February, from $83 million in January. Office supplies dipped 21% to $69 million in February, and toys and videogames dropped 31% to reach $86 million in February.

"In light of the economic slowdown, we are pleased to see that the Internet continues to thrive as a consumer shopping channel," said James L. McQuivey, research director at Forrester. "It's also reassuring to see the Valentine's Day love fires stir a 40% jump in online jewelry sales in February. Over time, the Index will expose more valuable trends like this in online consumer spending, providing retail marketers with a stronger understanding of consumer behavior."

"Physical retailers were challenged in February by, among other things, bad weather in many parts of the country, which kept many consumers house-bound," said NRF President Tracy Mullin. "The online figures show strength in the very areas where physical stores were weakest last month, strongly suggesting that consumers embraced the multichannel approach in February to meet their buying demands."

About The Index
The NRF/Forrester Online Retail Index measures, on a monthly basis, the growth and seasonality of online shopping based on data collected from online shoppers. The Index is based on 5,000 responses during the first nine business days of the month from an online panel developed by Greenfield Online. The survey results for February were fielded from March 1 through March 8, 2001.

The monthly panel is weighted to Forrester Research's Benchmark Panel, which surveyed nearly 90,000 US and Canadian members of a consumer mail panel developed by NPD Group, a market research firm. Data was weighted to demographically represent the North American population. The Benchmark Panel was fielded from late November 1999 to February 2000.

Study Reveals Enhanced Rich-Media Usage
Excite@Home, a leader in broadband, today released findings indicating that broadband users take greater advantage of bandwidth-intensive applications they used when they were dial-up customers, particularly those products that are audio and video-based.

Excite@Home recently commissioned a study – conducted by Harris Interactive, a global leader in Internet-based market research – that queried user-behavior changes of those who moved from a dial-up connection to a broadband connection. According to the study, since moving from dial-up to broadband:

- 93% of users download more MP3s than they did when using a dial-up connection;
- 90% download more music/videos;
- 89% watch more streaming video;
- 86% listen to more streaming audio;
- 79% transfer a greater number of large files; and
- 78% share more photos online.

"Broadband users are making the most out of their super-fast connections by consuming the rich media applications that are optimized by broadband," said Byron Smith, executive vice president, consumer broadband services and chief marketing officer for Excite@Home. "Broadband encourages users to take advantage of everything the Internet has to offer, including high-bandwidth programs that are not maximized in a dial-up environment."

The Excite@Home broadband-usage study measures consumer awareness of the @Home broadband services, as well as differences between narrowband and broadband users. The above information is gleaned from studies conducted for Excite@Home by Harris Interactive using their online panel of cooperative respondents. The data was gathered through online interviews with 587 respondents conducted in November 2000.

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