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T
e c h B y t e s
January
24, 2003
Small Business Holiday Sales Surge
By Patricia Fusco
Although
traditional retailers reported a sales slump for the fourth quarter
of 2002, online small businesses operating e-commerce Web sites
experienced a boost in holiday sales. At least according to a study
of 5,000 small- to medium-sized businesses that participated in
a survey conducted by Affinity Internet. More than 40 percent of
online small businesses report increased sales from their e-commerce
Web sites this holiday season, when compared to 2001 sales. Of those
businesses reporting higher sales, 79 percent experienced sales
increases in excess of 10 percent — half said their sales increased
more than 20 percent.
In
contrast, Goldman Sachs index of same-store sales reports that the
retail industry experienced one of the worst holiday sales seasons
in the past three decades — only one percent reported improved sales
over 2001 performance. "Given the general increase in Internet usage
and the number of households now with high bandwidth connections,
it isn't a surprise that small businesses with a Web presence are
starting to sell more online," Jim Collins, Affinity chief operating
officer, said. Online Small Business Trends Of course, if 40 percent
of sales are up, then 60 percent of sales were down or flat. Thirty-one
percent of small businesses surveyed reported negligible comparable
sales for 2002 and 28 percent reported decreased sales.
This
is understandable, since 62 percent of small businesses indicated
that they solely relied on "word of mouth" advertising for the holidays
and another 67 percent said they did not even offer sales incentives
— like free or discounted shipping as an incentive to buy. The Affinity
survey also found that e-commerce sites selling collectors' items
accounted for the largest increase in sales, totaling 60 percent.
Other popular categories of goods proved to be toys, jewelry, apparel,
books, music, and movies.
Additional
key findings include:
? Most sales (68 percent) consisted of one to three items.
? Traffic on the sites surveyed was also up — an average of
43 percent.
? Most (75 percent) owners of online small business owners
are male.
?
More than half of online small business owners have a four-year
college degree or higher (54 percent) and all have finished high
school.
Contrary
to popular belief that young people are the primary group using
the Web as a location for their business, 80 percent of online small
business owners surveyed are over the 30-years-old. Although there
does not seem to be any specific geographic concentration of online
small businesses, most online business owners surveyed have one
to five employees (68 percent). Additionally, 15 percent of businesses
surveyed are sole proprietorships and more than half of the owners
(51 percent) say running their online business is their primary
occupation.
Affinity
Internet is a hosting service provider that specializes in serving
small- to medium-sized businesses. The company hosts more than 390,000
domains for more than 170,000 customers worldwide. The survey of
5,000 small business clients was completed early in January 2003.
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