San Jose, Calif., November 30, 2000 — More than four out of 10 experienced online retail buyers will be doing at least some of their holiday gift buying online this year, according to a recent survey by Gartner Group, Inc. (NYSE: IT and ITB). Among those buying gifts online, this spending on the Internet will account for 43 percent of their total holiday spending. Gartner's survey showed that people in the United States who have a year or more experience in buying products and services over the Internet will spend $8.4 billion this year. Worldwide online holiday spending this year is projected to reach $19.5 billion.

"Internet retailers will be selling to a much more experienced online shopper this year," said David Schehr, research director in Gartner's E-Business Services group. "This is both a positive and a negative for the more established online retailers. It's positive because online buyers tend to shop at sites with which they already have experience, so marketing efforts can be more effectively targeted. But expectations will also be higher, and it's crucial that Internet retailers fulfill customer requests this holiday season, or they risk losing those customers forever."

The top five categories most frequently listed as gift types to be purchased on the Internet this year are 1) books; 2) CDs or cassettes; 3) toy or video games; 4) videos or DVDs; 5) computer software or games.

This is similar to the top listed items purchased last year with the exception of clothes and shoes. Last year, the clothes and shoes category was No. 4, but this year only 8 percent of online shoppers surveyed said they are most likely to shop for clothes online. Four out of five online shoppers said they plan to make most of these purchases in brick-and-mortar stores.

Other Gartner research has shown that, in general, clothing is a popular category among Internet buyers, with a high conversion of shoppers to buyers. However, much of this is due to a shift in ordering channels among consumers who are already comfortable with buying clothing through catalogs. For most shoppers, even Internet shoppers, clothing is still something that requires the touch, feel and try on process available through a brick-and-mortar in-store experience. "But clothing retailers can encourage online buying through idea and gift lists, such as a top 10 clothing gift wish list page for specific age groups. Things that will help Aunt Mary pick the right gift for her niece or nephew have a real appeal," Mr. Schehr said.

This survey was conducted among a sample of 2,704 Internet users identified during a national mail survey. These respondents represent a cross section of the entire U.S. adult population. The study was fielded during September and October of this year.

Additional research and analysis on the Internet retailing marketplace is available to subscribers of Gartner's E-Business Services. These programs are part of a wide range of Gartner services examining the e-business industry. These programs are designed to help senior executives, strategic planners and investors capitalize on emerging opportunities by providing research and analysis on electronic commerce and Internet marketplaces. Additional information on these programs is available on Gartner's Web site at http://www.gartner.com/public/static/home/ggebiz.html. To subscribe to these services, please call 800-419-DATA or 408-468-8009.

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