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Online Buying Poised for Growth

22 Sep, 2005 By: Judith McCourt

With the holiday season approaching, expect more consumers to shop online, especially for home entertainment products.

According to the comScore networks, online spending by U.S. consumers rose 25 percent in 2004, to a record $66.5 billion — and that figure excludes travel. Nearly a quarter of that amount ($15 billion) was spent during the November and December holiday shopping season.

While no breakdown exists on what percentage of the $4.68 billion consumers spent buying videos in those same two months was channeled through the Internet, expect a new record to be set this year — particularly in the face of escalating gas prices.

Heavy DVD fans are becoming more and more likely to buy over the Internet.

Thirty-five percent of high-volume DVD buyers — defined as consumers who buy more than 20 discs a year — said they had bought at least one DVD online in the last year, according to Home Media Research's annual consumer survey.

By comparison, 17 percent of consumers who buy between five and 20 DVDs a year and just 13 percent of consumers who buy fewer than five DVDs annually had bought a disc over the Internet.

While Amazon remains the leading online seller of DVDs, brick-and-mortar retail sites are rapidly gaining ground among consumers.

In December 2004, Walmart.com was the third-largest online retailer and the ninth most popular Web site, overall, according to comScore Media Metrix. The retail giant had more than 32 million visitors during the peak 2004 holiday season, finishing behind eBay (No. 5, 66.5 million visitors) and Amazon (No. 6, 48.2 million visitors).

Another thing that bodes well for online DVD sales this fourth quarter is the fact that more and more gift lists are now received with links to a site where the desired item can be purchased.

If you consider that nearly three-fourths of consumers say they consider giving DVDs as gifts for Christmas or Hanukkah, and factor in the growing shelf-space crunch at traditional retail, the conditions are right for a hefty uptick in online DVD purchases in the coming months.

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