1998 holiday season marked by jump in Internet retailing

Brian Seals

Monday, Dec. 21, 1998 | 11:41 a.m.

The rise of the Internet changed the traditional holiday shopping experience more than ever this year.

People like UNLV student Yvonne Westfall point to two reasons they prefer to shop via computer: convenience and selection.

"It's actually just quicker and easier," Westfall said. "You don't have to leave and go to the mall and fight the crowds."

Westfall planned to make about 50 percent of her 1998 holiday purchases online. Her two preferred sources are Amazon.com, for books and compact discs, and J.Crew for apparel.

Buying CDs online allows the customer to listen before they buy and conveniently locates those hard-to-find tunes. Also, Westfall said shopping from J.Crew online offers the same selections as shopping at a store.

"You just send your order in, like an e-mail," she said. "You don't even have to deal with talking on the phone."

The Internet is still something of a novelty when it comes to retail commerce, but it's catching on. New York-based Jupiter Communications estimates that online spending during the holiday season is expected to double from last year's $1.1 billion to $2.3 billion in 1998.

Much of the growth of online shopping is due to more women using the Internet, said America Online spokeswoman Wendy Goldberg. She said AOL's audience is now 50 percent women, compared to 17 percent just three years ago.

Another reason for the increase of online shopping is that more retailers are utilizing the World Wide Web to sell their wares. Whereas purchases of computer equipment led online shopping two years ago, toys and apparel are now the biggest sellers, as is the case in the off-line world.

"They're (customers) finally seeing more and more merchants they know and trust," Goldberg said.

Also, merchants have taken steps to make the shopping process more convenient by allowing themselves to be grouped together on various sites, forming virtual online malls such as Shop at the Mall (www.shopatthemall.com) and Storerunner (www.storerunner.com).

Shop at the Mall, for example, offers retailers differing levels of sites. Stores can choose a basic presence on the Web to a site that offers a couple of products to ones that offer a full catalog

Many retailers no longer see the Internet as a threat, but as a tool to increase sales.

"What they've found is, it's an extension of their physical store," said Shop at the Mall owner Ray Evans.

Storerunner offers a different approach, directing consumers to particular product categories rather than a particular store. That saves the customer from having to search for a particular store's Internet site and enables the shopper to find an item from a variety of sources.

"With a half billion web pages out there, it's pretty busy," said Storerunner Chairman Dale Sundby. "We say, 'tell me what you want, I'll tell you who has it."'

There's plenty of growth to come in Internet retailing.

An International Mass Retail Association survey shows just 6.6 percent of shoppers planned to shop online this year, though 10 percent of Westerners surveyed said their preferred mode of shopping would be on the computer.

Moreover, most online shoppers are buying for themselves, not gifts for others, according to Jupiter Communications. Only 11 percent of online buyers say gifts comprise a majority of their purchases.

"While online retailers have been successful in capturing dollars that consumers spend on themselves, they have been unsuccessful in getting the majority of those same consumers to spend their gift dollars online," said Jupiter's Nicole Vanderbilt.

But webmasters say that will change.

Evans said his site has seen a 15 percent increase in traffic over last holiday season. And Goldberg said online shoppers will come back if they have a good experience.

"Once they do, they're hooked," she said.

And Evans said customers incrementally increase spending after they begin shopping on the internet. He said the average first transaction is about $120, with the second rising to about $250.

Steps have also been taken to beef up credit card security. For example, retailers on AOL must meet certain guidelines for security and encryption. Also, credit card companies limit liability on Internet purchases. But Goldberg said customers should still take precautions.

"If you're going to shop on the Internet, be sure you shop with a merchant you can trust," Goldberg said.