This year’s holiday season promises to be an interesting one for wireless carriers and vendors offering their products to online buyers.
Jupiter Communications, a new media research firm, predicts holiday shoppers will spend $2.3 billion online this season, up from $1.1 billion in 1997. According to other estimates, about 10 percent of the population is expected to shop for gifts online this year.
Andrew L. Sernovitz, president of the Association for Interactive Media, said electronics and computers are by far the most popular items for online shoppers, followed by gift items similar to what would be available in a mail-order catalog.
Sernovitz said last year was a warm-up for a selling season this year that he expects will attract 10 times as many shoppers, due in part to a wider availability of products on the Internet.
The association, with partners MasterCard, Shop.org and EZSpree.com, on Friday plans to launch National Online Shopping Week to raise consumer confidence in the security and convenience of online shopping.
The availability of wireless products and services for sale on the Internet has been slim to none until recently. Just in time for the traditionally strong fourth-quarter selling period, though, some wireless companies are launching Web sites for online shopping.
Qualcomm Inc., for instance, last week took its first step into the electronic-commerce arena with The Qualcomm Store, an Internet-based retail shop that will allow customers to purchase accessories for Code Division Multiple Access handsets and the company’s Eudora e-mail software. Customers also can register at the site to receive price discounts, sales notifications and promotional e-mail notifications, said Qualcomm.
Carriers AT&T Wireless Services Inc. and Bell Atlantic Mobile also launched online stores within the last couple of months.
AT&T Wireless customers can use its online store to assess their wireless needs and service availability, select a service plan, try out wireless phones, place orders and make purchases in a series of steps, said AT&T. Customers will receive their activated phone and rate plan within four business days, and each purchase includes a risk-free trial where the customer pays for airtime usage but can return the equipment for a refund during the first 30 days, said the company.
Bell Atlantic’s site allows customers to shop for service, phones and accessories. Orders are processed immediately and shipped the same day, said the company.
“Just as we offer choices in wireless service plans, we also give our customers a wide choice in how and where to do business with us,” said Debra Carroll, Bell Atlantic Mobile’s vice president of marketing. “As Internet commerce becomes increasingly popular with consumers, our Internet store will become a key sales channel in the years to come.”
Bell Atlantic last Friday added its MobileMinutes prepaid service to its online product offering. “It’s neat for gift-giving because there’s no credit check and no deposit,” said BAM spokeswoman Nancy Stark. To place an order, customers need a credit card, and current MobileMinutes users can purchase replenishment cards.
Other companies, such as Nth Dimension Corp. and CellMart, offer wireless products and services online. Nth Dimension’s Web site, Wireless Dimension, allows customers to shop for and purchase handsets and services in a format that allows them to comparison shop.
AirTouch Communications Inc., AT&T Wireless and Southwestern Bell Wireless each have signed agreements with Wireless Dimension to market their services. Nth Dimension launched its Web site in May, and company officials said it has been successful both in signing up customers and driving off-line sales.
Court Lorenzini, co-founder and chief executive officer of Nth Dimension, said site traffic had begun to increase significantly last week-doubling each day during the first half of the week-in part because of the upcoming holiday season and in response to an advertising campaign the company launched. The campaign includes print and online ads in holiday shopping guides to encourage people to think about wireless services when shopping for gifts.
The opportunity for electronic commerce is growing quickly. Visa International estimates global consumer online purchases will grow at a 67-percent compound annual rate during the next five years to reach $100 billion by 2002. Visa projects 1998 online spending to total $15.3 billion, nearly double what online customers spent last year.
Forrester Research Inc. predicts worldwide Internet commerce could reach as high as $3.2 trillion in 2003, to represent nearly 5 percent of all global sales.
“There is no question that iCommerce will represent a significant portion of the global economy over the next five years,” said George F. Colony, president of Forrester Research. “If a favorable climate can be established, Internet commerce will reshape the global economy.”
A study earlier this year by IDC/Link, however, found only about 8 percent of those respondents who indicated plans to purchase wireless service said they would do so online. Nearly 61 percent said they were very unlikely to shop online.
Julie Reitman, an analyst at IDC/Link, said many of those customers are first-time buyers who prefer the “hand-holding” attention that can only be provided through human contact. Customers already are familiar with wireless products and services are more likely candidates to shop online, she said.
Derrick Chasan, vice president of marketing at Nth Dimension, said there is another reason why wireless customers have been slow to shop online.
“A lot of people who are looking for wireless are not thinking of using the Internet for research,” he said. “It’s not about resistance to using the Internet, but it’s about awareness. People go to retail outlets because that’s what they’ve always done before.”
