Few Profits in the Stockings for eRetailers This Holiday Season, According to IDC

FRAMINGHAM, MA — OCTOBER 31, 2000 — Despite more than $12 billion in online spending by U.S. consumers in 4Q00, online retailers will struggle to turn a profit, and many will experience million-dollar losses. On the other hand, companies that provide services or logistics to eRetailers are poised for explosive revenue growth. This is the message of a new IDC bulletin about online spending during the 2000 holiday season.


"The reward for going through the trouble of picking, packing, and shipping millions of holiday packages from expensive warehouses will be $200 million in aggregate losses for the online retail industry," said Jim Williamson, senior analyst for IDC's Internet Economy research program.

"Even this impressive figure masks the staggering losses IDC anticipates will be sustained by many eRetailers."

According to IDC, unprofitable eRetailers collectively will lose $700 million while money-making firms will turn a joint profit of $500 million. IDC believes the most successful online retailers this holiday season will be those that offer in-store returns and that have improved their logistics infrastructures to avoid the delivery problems that plagued the online retailing industry last year. IDC's new bulletin Holiday 2000: Ho! Ho! Humbug (IDC #B23321) forecasts the effects of holiday spending on online retailers, the changing spending habits of online shoppers, and strategic trends eRetailers will deploy to survive the holiday season. To purchase the bulletin, contact Demetra Georgakopoulos at 1-800-343-4952 extension 4496 or demetra@idc.com.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in- depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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