As the Internet Goes Mainstream, Shoppers Hit Send Earlier, According to the American Express Retail Index.

Business Editors

NEW YORK--(BUSINESS WIRE)--Dec. 3, 2003

1 in 2 Americans Will Log On to Shop This Holiday Season; Led by

Women

For the first time, the Internet goes mainstream this holiday season with more than one-half of Americans (54%) planning to log on to compare prices, browse, purchase or send electronic cards, according to the American Express Retail Index on Internet shopping. This is a sharp increase from 46% in 2002 and from 42% in 2001.

And, with more holiday shoppers choosing to purchase gifts on the Internet (31%, up from 18% in 2002), more of them say they will be completing their holiday purchases by mid-December (38%, up from 30%). They may be more motivated than their offline counterparts to finish their holiday shopping, as some popular Internet retailers require orders to be placed as early as December 4th in order to guarantee Christmas delivery without additional charges.

"The Internet has clearly moved into the mainstream even while the mall and individual stand-alone stores continue to attract the overwhelming majority of holiday shoppers," said John Theiss, vice president, retail industries, American Express. "As computers and online services have become more affordable, more consumers are drawn to the benefits of the Internet, including its competitive prices, broad selection and convenience."

Holiday Internet users, who plan to buy for more people than their offline counterparts (15 vs. 13 recipients), will spend $1082 on average for gifts this year. On average, they will spend about a quarter (26%) of their overall holiday shopping budget online. Men will spend more of their budget online than women (27% compared to 24%).

Price Dictates; Yet Online Shoppers Enjoy Rewarding Themselves for Shopping

Like their offline counterparts, Internet users' purchasing decisions will be driven by price. This year, more online shoppers will use the Internet to compare prices (62%, up from 56% of Internet users last year). A majority of Internet gift-purchasers (78%) say deep discounts will motivate them, followed by special storewide sales (69%) and free delivery or gift-wrapping (53%).

Online purchasers, far more than offline shoppers, admit they "almost always" or "sometimes" reward themselves when shopping for others by buying something for themselves - 46% compared to 36%.

"With the increase in Internet shopping this season, online retailers may be seeing the rush of last minute shopping long before the bricks and mortar world," added John Theiss. "For most Internet shoppers, the last minute comes well before December 24th as they rush to get on-time delivery without overnight charges."

Online Shoppers' vs. Offline Shoppers' Gift Lists

Holiday Internet purchasers are more likely than offline shoppers to give the following gifts this holiday season: clothing (85% online vs. 76% offline), music, tapes and CDs or DVDs (82% vs. 77%), gift cards, gift certificates and cheques (79% vs. 63%), toys and games (72% vs. 61%), books and magazine subscriptions (59% vs. 40%), home furnishings and decorative items (52% vs. 34%), and, no surprise, computer/accessories (51% vs. 15%), including computers, laptops, software, as well as personal communication products such as a Palm Pilot, consumer electronics (48% vs. 27%), health, fitness and sports equipment (38% vs. 24%) and experiential gifts (35% vs. 34%). More than one-third will purchase pets and/or pet accessories (36% vs. 22%).

It will come as no surprise that the wish lists of Holiday Internet users are often more than twice as likely to include computers or computer accessories (40% vs. 19%), personal communications products (24% vs. 11%) and toys and games including video games (18% vs. 8%).

Who's Using the Web, and Do They Like It

The average age of the typical holiday shopper using the Internet is 42 years old with an average household income of $64,500. The majority of online shoppers are 18-49 (72%); one in five (26%) is 50 years and older. Most are married (67%) and less than half (47%) have children at home.

As they do in the bricks and mortar world, women make up the majority (54%) of online shoppers. This is true for those browsing for gift ideas (54% vs. 46% men), comparing prices (51% vs. 49%), purchasing gifts (51% vs. 49%) and sending cards electronically (53% vs. 47%).

More Internet users say they find holiday shopping pleasurable (57% compared to 53% of non-Internet users). Despite the convenience of the Internet, 36% of online shoppers say that holiday shopping is an anxiety-provoking chore, compared to 38% of offline shoppers.

The American Express Retail Index on holiday shopping was conducted by telephone between October 20, 2003 and October 28, 2003 and surveyed 803 heads of households, age 18 and older. The 2003 American Express Retail Index looked at buying attitudes, shopping trends and preferences among the general consuming public. The margin of error is +/- 3.5%.

American Express Company is a diversified worldwide travel and financial services company founded in 1850. It is a leader in charge and credit cards, Travelers Cheques, travel, investment products, insurance and international and online banking. For more information on American Express, visit out Web site at www.americanexpress.com.

Additional information on the American Express Retail Index on holiday shopping is available on the Web at: http://newsroom.mbooth.com/amex/