By Jennifer LeClaire
Part of the ECT News Network
01/12/05 11:30 AM
Like thousands of other online retailers, 2004 was a banner year for PearlParadise.com. And, like thousands of other online retailers, much of the company's success came during the holiday shopping season that many are calling a turning point for e-commerce.
Numbers don't lie. The online pearl purveyor's sales skyrocketed from US$250,000 in December 2003 to just over $1 million in December 2004. PearlParadise.com's average ticket during the month of December jumped $382 to average $624 per transaction.
What's more, the company set a one-day record on December 9 with more than $100,000 in sales. Its highest ticket item sold for $23,250, and sales to Europe increased 50 percent year-over-year to account for nearly 15 percent of total revenue.
"What we have noticed this holiday season that is strikingly different than years past is that consumers are much more willing to spend money online, and on luxury goods," Jeremy Shepherd, president of PearlParadise.com, told the E-Commerce Times.
"One factor that seems to account for such a dramatic increase in online sales is trust. Consumers are much more willing to buy product site-unseen. Shopping online has become a way of life for so many consumers," Shepherd said.
PearlParadise.com's experience is no fluke. Jewelry sales jumped 113 percent to $1.9 billion in 2004, compared to the $888 million spent in 2003, according to a holiday eSpending Report from Goldman, Sachs & Co., Harris Interactive (Nasdaq: HPOL), and Nielsen//NetRatings. That marked one of three categories that generated the highest year-over-year growth. Flowers and computer hardware/peripherals were the other two.
In light of the evidence, it would seem that the reports of e-commerce's death were greatly exaggerated. That's the conclusion that many analysts are coming to in the face of a record-breaking 2004 online holiday shopping season that totaled nearly $9 billion -- a whopping 24 percent increase over the year-ago period, according to Nielsen//NetRatings. The overwhelming conclusion: e-commerce is alive and well.
Indeed, many observers said the successes of the 2004 holiday shopping season are not just a spring board, but a full-fledged turning point for e-commerce. Analysts said the dot-com fallout is now behind us and we've come to the point where e-business truly means business.
"Online shopping contributed significantly to overall 2004 holiday sales by attracting customers through a broad product selection," Nielsen//NetRatings senior retail analyst Heather Daugherty said. "Consumers have become accustomed to purchasing online over the years and look to the Internet to find comprehensive product information, competitive prices and easy gift delivery, allowing them to have more time to spend on other holiday activities."
As Daugherty suggested, there was plenty of revenue for online retailers of all kinds in the e-shopping arena. And not just all kinds, but all sizes. It wasn't only Amazon.com (Nasdaq: AMZN) and the other well-known brand names that cashed in during 2004. Even lesser known e-tailers like PearlParadise.com took large deposit envelopes to the bank.