Direct Marketing, Mail Order, and E-commerce News from the National Mail Order Association

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Online Holiday Shopping Season 2004 Hits $23.2 Billion, Rising 25
Percent from 2003, according to the Holiday eSpending Report from
Goldman Sachs, Harris Interactive and Nielsen//NetRatings

Online Consumers Spent the Most on Apparel/Clothing, Toys/Video Games
and Consumer Electronics; Fastest-Growing Categories included Jewelry,
Flowers and Computer Hardware/Peripherals

ROCHESTER, N.Y. and NEW YORK- January 3, 2004 - The latest holiday
eSpending Report from Goldman, Sachs & Co., Harris Interactive(r), and
Nielsen//NetRatings revealed that online shoppers in the U.S. spent
$23.2 billion during the 2004 holiday season, excluding travel. This
reflects a 25 percent increase from the $18.5 billion spent online
during the same timeframe in 2003.

According to the 2004 eSpending report, based on weekly surveys of more
than 1,000 respondents, online consumers spent the most on
apparel/clothing, totaling $3.8 billion, or 16 percent of total online
revenue, during the 2004 holiday season (see Table 1). The toys/video
games category was second with $2.5 billion, or 11 percent of online
revenue, while the consumer electronics category rounded out the top
three with $2.3 billion, or 10 percent of total online revenue.

Categories generating the highest year-over-year growth in holiday
dollars included jewelry, flowers and computer hardware/peripherals.
Jewelry jumped 113 percent to $1.9 billion during the 2004 holiday
season compared to the $888 million spent in 2003 (see Table 2). Floral
retailers experienced a 59 percent surge in online revenue to $530
million while computer hardware/peripherals increased 30 percent over
last season, generating $2.1 billion in online revenue this year.

Table 1: Online Shopping Categories Ranked by Total Online Revenue, 2004
Holiday Season
+-------------------------+----------------+-----------------------+
| Category                         |  % of Total        |2004 Projected Online |
|                                        | Online Revenue | Revenue in Millions     |
+-------------------------+----------------+-----------------------+
| Apparel/Clothing             | 16%                  | $3,755                       |
| Toys/Video Games          | 11%                 | $2,528                        |
| (hardware and software)  |                                                              |
| Consumer Electronics      | 10%                 | $2,306                        |
+-------------------------+----------------+-----------------------+
Source: Goldman Sachs, Harris Interactive, and Nielsen//NetRatings
eSpending Report, 2004 *Number of respondents: More than 1,000 online
U.S. adult consumers surveyed weekly (Weeks1-8: n=9,077) *The Holiday
eSpending Report defines November 1 to December 26, 2004 as the 2004
Holiday Season.

Table 2: Fastest-Growing Categories Year-over-Year, 2004 Holiday Season
+----------------------+-------------+-------------+-------------+
| Category                    | 2004 Online | 2003 Online | 2004/2003 % |
|                                   | Revenue in    | Revenue in   | Growth          |
|                                   | Millions         | Millions        |                       |
+----------------------+-------------+-------------+-------------+
| Jewelry                       | $1,888         | $888            | 113%           |
| Flowers                      | $530            | $333            | 59%              |
| Computer                   | $2,144         | $1,650         | 30%              |
| Hardware/Peripherals |                     |                     |                      |
+----------------------+-------------+-------------+-------------+
Source: Goldman Sachs, Harris Interactive, and Nielsen//NetRatings
eSpending Report, 2004 *Number of respondents: More than 1,000 online
U.S. adult consumers surveyed weekly (Weeks1-8: n=9,077) *The Holiday
eSpending Report defines November 1 to December 26, 2004 as the 2004
Holiday Season.

"Online shopping contributed significantly to overall 2004 holiday sales
by attracting consumers through a broad product selection," said Heather
Dougherty, senior Retail analyst, Nielsen//NetRatings. "Consumers have
become accustomed to purchasing online over the years and look to the
Internet to find comprehensive product information, competitive prices
and easy gift delivery allowing them to have more time to spend on other
holiday activities."

Wider Product Selection Drives 2004 Online Shopping

The 2004 eSpending report showed that overall the majority of online
consumers were satisfied with this season's Web shopping experience: 37
percent were very satisfied and 24 percent were somewhat satisfied. In
addition, 30 percent of respondents felt this year's online shopping was
better than last year.

Several factors contributed to the success of online shopping in the
2004 holiday season. Similar to last year, the 2004 eSpending report
indicated that 36 percent of respondents cited a preference to avoid
crowds as the top reason to buy online rather than visit a store.
Thirty-six percent also cited finding a lower price online was the
reason they took to online shopping, while a wide product selection
rounded out the top three reasons with 33 percent.

About the eSpending Report
The eSpending Report by Goldman Sachs, Harris Interactive and
Nielsen//NetRatings is based on weekly national surveys conducted
between November 1 and December 26, 2004, among more than 1,000 adult
consumers who are online and who were randomly invited to participate
from among the Harris Interactive online panel of survey respondents.
The overall 2004 holiday shopping season data are based on responses
from a total of more than 9,000 U.S. adults, who are online. The data
were weighted to be representative of the total U.S. online population
of adults (aged 18 years and over), and with probability samples of
1,000, one can say with 95 percent certainty that the weekly results
have a sampling error of plus or minus 3 percentage points. The online
samples are not probability samples. The eSpending Report offers weekly
intelligence on online shopping and spending by market segment and also
tracks consumer attitudes and motivations that drive online shopping.

About Goldman Sachs
Goldman Sachs is a leading global investment banking, securities and
investment management firm that provides a wide range of services
worldwide to a substantial and diversified client base that includes
corporations, financial institutions, governments and high net worth
individuals. Founded in 1869, it is one of the oldest and largest
investment banking firms. The firm is headquartered in New York and
maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major
financial centers around the world.

About Harris Interactive(r)
Harris Interactive Inc. (www.harrisinteractive.com), the 15th largest
and fastest-growing market research firm in the world, is a Rochester,
N.Y.-based global research company that blends premier strategic
consulting with innovative and efficient methods of investigation,
analysis and application. Known for The Harris Poll(r) and for
pioneering Internet-based research methods, Harris Interactive conducts
proprietary and public research to help its clients achieve clear,
material and enduring results.

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