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Turbulent Times Will Challenge Online Retailers This Holiday Season, Predicts Forrester Research

Online Holiday Sales Projected To Hit $9.5 Billion

Cambridge, Mass., October 29, 2002 . . . Due to continued economic and political uncertainty, online sales in the third quarter fell to $17 billion. After two consecutive quarters of $20 billion sales, this marks the first decline in eCommerce history. According to the Forrester Research, Inc. (Nasdaq: FORR) annual holiday sales report, spending will rebound but not fully recover in the remainder of the year: The holiday season will ring up $9.5 billion in online sales, and Q4 sales will reach previous quarterly spending levels of at least $20 billion.

"While more consumers will shop online this year, they are pinching pennies more than ever," said Carrie A. Johnson, senior analyst at Forrester. "Due to lingering economic concerns, consumers will spend less this season. They will spend $433 per person versus $463 during the 2001 holiday season. Add this to the short holiday season, and online retail will reach $9.5 billion in sales this year -- up from $8.3 billion in holiday 2001."

Although proven leaders Amazon.com and eBay will help boost the industry to at least $20 billion for the fourth quarter, the dockworker’s strike, threat of war, and waning consumer confidence will keep eCommerce growth at bay. Consumers this quarter will shop for lower-cost practical items like toys and electronic gift cards, not discretionary items like jewelry and luxury goods.

Forrester Research identifies and analyzes emerging trends in technology and their impact on business. Forrester's WholeView™ Research, Strategic Services, and Events help $1 billion-plus clients understand how technology change affects their customers, strategy, and technology investment. Established in 1983, Forrester is headquartered in Cambridge, Mass. For additional information, visit www.forrester.com.

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Forrester Research, Inc.
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