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Web retail sales rise 34% to $11 billion

THE BALTIMORE SUN

When Carrie Peters went to a Seattle mall this week to buy a bathing suit for vacation, she did a lot of running around, only to find swimwear is not on the shelves this season.

"I went to five different stores. Nobody had it," said Peters, who was hoping to try on a suit before buying it. "And if it was something that I could have found online, I would have much rather done that."

Peters, who works for Seattle-based Amazon.com, does much of her shopping online, from shoes to holiday gifts. Her purchases are part of a growing number of sales that are being made on the Internet.

Online retail sales totaled $11.06 billion during the third quarter, up 34 percent from the third quarter last year, according to estimates from the Census Bureau. That's 1.3 percent of total retail sales for the third quarter, compared with the 1.1 percent of total sales in the quarter last year.

"About a third of U.S. adults are buying online in a given quarter," said David Schehr, a research director who follows consumer behavior in retailing for GartnerG2, a unit of Gartner Inc. of Stamford, Conn.

Most of the growth in online retail has come from "multi-channel" retailers, or companies that consumers already know from stores or catalogs, he said. "The Internet becomes just another channel from which they can serve consumers," Schehr said.

Sears, Roebuck and Co., for instance, estimates that 1 out of 10 major appliance purchases at its stores are influenced by Sears.com. Although that Web site is not yet profitable itself, it is driving consumers to the store. Spokeswoman Ann Woolman said Sears.com expects to be profitable this year.

The Web site for Best Buy Co. Inc. also allows consumers to learn about products before they decide to buy them at the store or online, said company spokeswoman Donna Beadle.

"Bestbuy.com is not just an e-commerce site, it's also a site for research," she said.

About 40 percent of Best Buy's in-store shoppers visited the company's Web site before coming to the store - double the number from about the same time last year, Beadle said.

And 26 million people bought items on Amazon.com over the last year. However, that company has lost money nearly every quarter since it went public in 1997. Net loss for the third quarter that ended Sept. 30 was $35.1 million.

So why are shoppers turning to the Internet?

Convenience.

"If you want to buy a digital camera at 12 o'clock on a Sunday night, all the stores are going to be closed but Bestbuy.com will be open," said Beadle of Bestbuy.com.

A study done by Eisner Interactive of Baltimore and Eisner Communications Inc. found that consumers' reasons for shopping online included that the Internet has become easier to use, consumers are finding time to shop online at work, and it's easier to comparison shop online instead of running from store to store.

With only 19 shopping days between Thanksgiving and Christmas this year, the shortened holiday season is expected to drive the need for convenience, said Jennifer Betka, vice president of AOL Commerce, which oversees Web shopping for America Online.

About 60 percent of AOL users make purchases regularly or occasionally online, double the number of people who were buying online four years ago. And at least three-quarters of AOL users said that they've bought gifts online, Betka said.

Many will also be turning to the Internet for holiday shopping.

A GartnerG2 survey of more than 1,300 consumers found that nearly all of those who had bought holiday gifts online last year planned to do at least some holiday shopping online.

"The things that people tend to give as gifts also seem to be the things that people buy online," said Schehr of GartnerG2. Those items include books, music, DVDs, toys, clothing and shoes, he said.

And a shopper can often buy something online in less time than it takes to find a parking spot at the mall, Schehr said. "You can wait through three cycles of a red light just to get into the parking lot, and then you have to hunt around," he said.

Free shipping has also been a lure for shoppers using the Internet.

Sears shoppers are avoiding shipping charges through a program where they can buy products online and then pick them up at a nearby stores, said Woolman of Sears.com. That program makes up about 30 percent to 40 percent of Sears' online business, she said.

Bestbuy.com offers free shipping with online purchases, and Amazon.com has free shipping with purchases of $25 or more.

Copyright © 2021, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad

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