Revised Online Sales Figures

Ernst & Young released results from its 1999 post-holiday online retailing survey, finding that 26 percent of those polled made a purchase online during the holidays. Additionally, the number of women who shopped online during the holiday season outpaced the men. Fifty-six percent of total respondents were women and 44 percent were men.

The survey, which polled 1,283 Internet users, also found that while the sites most-visited by Internet shoppers remain consistent with earlier findings, a slightly different set of winners is revealed when reviewing the average dollar amount spent at these sites. For example, was the #1 shopping destination for 42 percent of online shoppers this holiday season, followed by eToys (20 percent), Toys R Us (19 percent), Barnes& (17 percent) and (16 percent). However, the top five sites by average dollar amount spent are Best Buy ($233), ($217), ($173), Disney ($172) and Walmart ($167). (See chart.)

Percentage of respondents who shopped at a particular site and the average they spent:

% respondents Average Amt.
shopping online Spent at Site
that shopped at site
————————— ——————– ————— 42.1% $128
eToys 20.3% $127
Toys R Us 19.4% $134
Barnes& 16.9% $63 16.1% $111
Cdnow 14.3% $69
KBToys 14.3% $89
eBay 12.5% $152
J.C.Penney 9.8% $151 7.2% $38 5.4% $33
Land’s End 5.2% $133
Columbia House 4.9% $71
Petsmart 4.9% $38 4.9% $72
Disney 4.6% $172 4.3% $217
Iqvc 4.1% $151 3.9% $173
Best Buy 3.7% $233
Borders 3.3% $69
LL Bean 3.3% $138
Walmart 2.9% $167

“Whenever we ask online shoppers where they make their purchases, comes up again and again as number-one,” said Stephanie Shern, Ernst & Young’s Global Director of Retail & Consumer Products. “This new data, however, reveals that online shoppers are spending their money across a variety of online retailers and categories. The purchases made online are broad-based and many Internet retailers are enjoying a successful season.”

Total Online Sales

The Ernst & Young survey found that, on average, online shoppers spent $1,225 on Internet purchases during the past 12 months, with 60 percent spending at least $500. Most (87 percent) said that the total dollar amount they spent increased over the previous 12 months, and almost all (91 percent) said that they would spend the same or more in the coming 12 months in online purchases.

“Given this new data, we are updating our estimate for online holiday sales in 1999 to $10 – 13 billion,” said Shern. “Considering the dramatic increase in the number of Internet sites and merchandise available, plus the broad-based success among these retailers, our estimate of total revenue for calendar year 1999 remains at $25 – $30 billion.”

Favorites and Disappointments

When Internet shoppers were asked to report on their favorite online retailers this holiday season, the top five sites listed as number-one were, eBay,, eToys and Barnes&Noble. (See chart.)

Favorite shopping sites and reasons why?

Total Top Reasons
1st mention
Favorite Site
——————————————————————— 32% good selection good prices easy to use site
48% 16% 14%
eBay 6% good selection Has items not good prices
56% available in 16%
18% 5% good prices 48% good selection 35%

eToys 5% good selection good availability easy to use
44% of items 20% site 11%

Barnes& 5% good selection easy to good availability
52% use site 9% of items 9%
Cdnow 4% good selection good prices 19% easy to use
50% site 14%

Toys R Us 2% good selection good availability good prices,
23% of items 18% ease of
ordering, 14%

Land’s End 2% good selection easy to use site offers brands
53% 16% I like
16% 2% good selection good prices good availability
44% 31% 19%
JCPenney 2% good selection on-time delivery good prices
40% 20% 13%

Disney 2% good selection easy to use site
43% 14%

In addition, respondents were asked to report on sites that disappointed them this holiday season. The top sites that were mentioned as number-one were Toys R Us, Best Buy,, eToys and Walmart. “Overall, the percentages given by respondents are fairly low,” said Shern. “Even though there were some disappointments, this is not such bad news.”

Disappointing sites and reasons why?
Total 1st Top Reasons
Toys R Us 13% merchandise out of merchandise could site was
stock 29% not be too slow
delivered 21% 18%

Best Buy 3% could not find desired
products 68% 3% merchandise merchandise could tech. Probs,
out of not be high shipping
stock 28% delivered 12% costs, poor
service 12%

eToys 3% merchandise could not find site slow/
out of desired merch. 22% difficult
stock 22% to use 9%

Walmart 3% could not find merchandise prices
desired out of un-competitive,

products 48% stock 13% site difficult to
use 13%

JCPenney 2% merchandise site was too could not find
out of slow 14% desired prod, tech
stock 52% probs 10%

KBToys 2% merchandise could not find technical problems
out of desired 25%
stock 25% products 25% 2% merchandise prices were not merchandise out
could not competitive 22% of stock 17%
be delivered

Barnes& 2% merchandise out could not find merch. Could
of stock 24% desired products not be
12% delivered,
priced not
competitive 12%

eBay 2% site was too slow site was hard poor customer
21% to use 21% service 14%

Total Holiday Shopping

Ernst & Young found that the average amount spent on total (all venues) holiday purchases was $1,080. Of these purchases, 67 percent were bought in stores, 7 percent through catalogs, and 26 percent online. Categories with the most purchases (all venues) were: toys (73 percent purchased from this category), apparel (70 percent), CDs/videos (64 percent), books (60 percent), and computer hardware and software (58 percent). Most purchased categories online were: books (50 percent), computer hardware and software (49 percent), toys (47 percent), CDs/videos (44 percent), and flowers (42 percent).

About Ernst & Young

Leveraging its strengths in e-business and drawing upon its deep knowledge of the retail and consumer products industry, Ernst & Young has developed a dedicated capability in e-tailing, helping retail and consumer products companies develop and execute 24×7 businesses that fully leverage Internet-based technologies to sell directly to customers. It is led by Stephanie Shern, Global and U.S. Director of Retail and Consumer Products.

Ernst & Young ([][1]) is one of the world’s leading providers of dot-company services in assurance, consulting, corporate finance and tax. More than 85,000 people around the world act as creative catalysts, joining forces with clients to do all it takes–FROM THOUGHT TO FINISH(TM)–to achieve positive, significant change. E&Y pioneered the development of advanced solutions that connect clients, partners and employees with E&Y resources and knowledge to help them rapidly reach their goals. Ernst & Young refers to the U.S. firm of Ernst & Young LLP and other members of the global Ernst & Young organization.



NCB Acquires FleetOne

Memphis-based National Commerce Bancorp confirmed Monday it has acquired FleetOne from Nashville-based Mapco, Inc. The acquisition, which NCBC made through its Nashville-based subsidiary TransPlatinum Service Corp., will expand NCBC’s fuel card and merchant processing from over-the-road vehicles to include a new line of business targeted to all commercial vehicle classes including local fleets. More than 2,000 fleets use ‘TransPlatinum’ fuel cards, which are accepted at approximately 4,000 locations nationwide. FleetOne’s cards, which are carried by the drivers of nearly 3,000 fleets, are accepted at nearly 1,000 sites nationwide. FleetOne’s market niche is vehicle classes one through six. About 90% of these companies have yet to contract for fuel cards and transaction processing. FleetOne’s employees will be merged with TransPlatinum’s current staff, with no personnel changes expected.



VISA named D. Bruce Wheeler as executive vice president and chief operating officer of VISA USA yesterday. Wheeler’s appointment at VISA comes on the heels of the retirement of William Stewart, who held an array of operational responsibilities and most recently was acting head of e-VISA. Prior to joining VISA, Wheeler was vice chairman of Omega Performance, a provider of training and consulting to the financial service industry, which was recently sold. Wheeler’s career also includes serving as an EVP at Mellon Bank; president and COO of Bank of New England; head of retail banking at First Nationwide Bank; and positions at Bank of Boston, Crocker Bank and First National Bank of Chicago.



Electronic Clearing House announced Monday afternoon the filing of an application to charter an online, national bank to provide merchants nationwide with electronic payment services. If the bank charter is approved the bank name will be Electronic Clearing Bank N.A. and will be a wholly owned subsidiary of ECHO. The application process is expected to take approximately four months to complete and, upon approval, ECHO will file an application to become a bank holding company. ECHO intends to name Jack Wilson as president of ECBank. ECBank will provide full deposit account services to merchants and will utilize the Internet as the primary medium for merchants to access banking information, transaction data and funds management services.



Online Resources & Communications Corp., a leading provider of Internet banking services, and Engineering Enterprises, Inc., a leading financial solutions technology provider and systems integrator for major securities firms, announced plans Monday to integrate real-time Internet banking and bill payment services with brokerage services provided by EEI’s EnterpriseFTX technology.

The partnership will enable customers of financial services firms to use the Internet to move money seamlessly among checking, savings and brokerage accounts, pay bills online and initiate securities transactions – all fully integrated and in real-time.

“This partnership is our first step since the recent passage of the banking reform law to help the financial services industry fulfill the law’s promise,” said Online Resources CEO Matthew P. Lawlor. “EEI has an unmatched reputation, especially in the brokerage industry, for delivering integrated software solutions. We plan to work together to mesh brokerage and banking services so that our client financial institutions can offer their customers the online services they’re demanding.”

Online Resources is a leader in the industry in offering integrated real-time banking and bill paying services, said George Anderson, EEI President and CEO. “Online Resources’ patented payment method that allows the merging of the real-time communications of the Internet with the banking industry’s real-time, trusted and secure payments systems offers unprecedented opportunities,” Anderson said. “Customers of our brokerage clients can look forward to investing proceeds from stock transactions in more immediate ways than have been possible before. And with ORCC’s partnerships with other financial services providers, our brokerage clients and Online Resources’ banking institutions can now be the one-stop financial shop our customers say they want.”

This merging of payments and information systems is part of Online Resources’ effort to build the real-time payments infrastructure for e-commerce, Lawlor says. His company hopes to leverage its 10 years of experience in the banking industry with its Internet-based software, systems and services. Online Resources’ patented method involves routing Internet transactions in real-time through the banking industry’s online payments networks, lowering costs and improving security.

These networks, which first enabled the hugely successful ATM machines, are now being used to fuel the escalating growth of debit cards. Next, the networks plan to move into e-commerce. The NYCE Network and the Star Network, both of which have processing agreements with Online Resources, have recently announced plans to explore real-time Internet point-of-sale.

“The world is rapidly moving toward the real-time integration of financial services,” said Lawlor, who has outlined his vision of real-time Internet payments for several financial industry trade publications. “Now, with EEI as a partner, we will move the brokerage industry into the real-time universe and meld it with online banking and bill paying services.”

Online Resources & Communications Corporation ( [][1]) is a leading outsourcer of privately branded Internet financial services, principally for regional and community banking institutions. The McLean, Virginia-based company has more than 400 institutional clients nationwide. It provides consumer bill paying and banking services and aggregates lending, insurance, securities trading and investment services. Online Resources performs real-time processing through its patented EFT gateway and full customer service for client institutions, giving them a comprehensive “hub” solution from a single vendor. Client consumer marketing programs are conducted under the co-brand.

Enterprise Engineering, Inc. (EEI) is a leading provider of enterprise and e-commerce software products for financial services firms. EEI’s product portfolio paves the way for banks, brokerages, and insurers to deliver integrated financial services via the Internet. EEI has created mission-critical systems and provided advanced training and strategic consulting for many Fortune 500 firms. The company’s key areas of expertise include real-time, Web-based delivery of online banking, brokerage and electronic commerce; online bill payment and presentment; creation of back office capabilities; and advanced technology training. EEI’s home page is located at [][2].




NY-based Creditor Systems announced this morning the availability of a wireless, portable credit card verification system. The patent pending president which has been in development and testing for over a year, consists of a terminal/printer, a three watt phone modem and a rechargeable battery. The terminal, which measures 5.5″ x 11″ x 6″ and weighs 6.5 lbs, is certified. The company’s trademark is “Cell more with a Creditor System”.


NextCard – Providian

NextCard, Inc. and Providian Financial Corporation announced last week a settlement of a lawsuit that NextCard filed against Providian over Internet banner advertisements for credit card products. In the lawsuit NextCard alleged that a Providian banner ad violated NextCard’s intellectual property rights, which Providian denied. Providian has not run its ad since July 1999.

Both parties described the settlement as a “business decision” to save time and money that would be spent litigating the case. No money changed hands. The parties have also agreed that the remaining terms of the settlement will remain confidential.

NextCard and Providian are financial services companies that offer consumer credit cards over the Internet.


Klein Chairs People’s

People’s Bank will enter the new millennium with a new chairman when John A. Klein officially assumes that role this morning. People’s leadership transition began in May when Klein was named president. He became chief executive officer Oct. 1.

Klein’s broad management experience over a 28-year career at People’s has included leadership positions in the Legal department, Regional Banking and Consumer Banking. Prior to being named chairman, CEO and president, Klein was head of the bank’s national and international credit card division where he was an architect of phenomenal growth, including People’s recent expansion into the United Kingdom.

Klein’s career at People’s began in 1971 as a management trainee and included assignments in various departments throughout the bank. In 1977, after graduating from law school, he established the bank’s Legal department, and, in 1984, was named general counsel.

“I am a product of the culture of the bank and am fundamentally committed to preserving and building on its heritage,” Klein said. “People’s has a tremendous foundation, including a proven commitment to our customers, our shareholders and our communities.”

“People’s ability to meet or exceed customer expectations is well-documented,” Klein said. “As we enter the new millennium, our customers, shareholders and communities can expect we will continue to be true to our values as we continue to evolve with the changing needs of the marketplace.”

People’s Bank ([][1]) is a diversified financial services company providing commercial, consumer, insurance and investment services. Founded in 1842, it is the largest independent bank in Connecticut with managed assets of more than $12 billion, 133 branches and more than 200 ATMs. People’s is a leader in commercial banking, residential lending, Savings Bank Life Insurance sales and supermarket banking. An international credit card issuer, it ranks 17th nationally as an issuer of MasterCard and Visa.

People’s subsidiaries offer brokerage services through People’s Securities, Inc., asset management through Olson Mobeck & Associates, Inc., equipment financing and leasing through People’s Capital and Leasing Corp., and insurance services through R.C. Knox and Company, Inc.




1ClickCharge and uTOK announced an agreement last week to develop a co-branded communications platform that will allow users to read notes containing knowledge and opinions about digital content before making a purchase. Starting last week, the 1ClickCharge and the uTOK co-branded application will be distributed free of charge to customers who want to join the 1ClickCharge community. Customers can use the co-branded platform to communicate with each other on a merchant site, or anywhere else on the Web.


VISA Lawsuit

Dallas-based ZixIt Corp. filed a lawsuit against VISA USA last week. The suit alleges that VISA intentionally set out to destroy ZixIt’s ability to market its ZixCharge Internet transaction authorization system, which competes against SET. ZixIt’s suit alleges that within two days of learning about ZixIt’s competitive technology, VISA initiated an attack against ZixIt. The alleged VISA actions included the posting of more than 400 messages, under at least seven aliases, on the Yahoo! ZixIt message board. The messages allegedly attacked Digit and Surcharge and promoted/recommended competitive companies in which VISA has investment positions. The company did not specify what it is seeking and VISA issued no response.