More Consumers Like The Online Life

Americans spent $19.8 billion online in the first three months of this year, a 6.4% increase from the last three months of 2004 and whopping 24% increase from the same period a year earlier, the Census Bureau reported last week. Still, online retail sales represent a mere 2.2% of all first-quarter retail sales.

More consumers are comfortable buying goods online, says economist Anne Wenzel, principal at the economic and market consultancy Econosystems, citing a recent University of California at Los Angeles study showing that consumers with three or fewer years of online experience feel at ease making Internet purchases. "It's a change in lifestyle," she says.

Most online purchases fall into selected categories, such as travel, books, and music, Wenzel says. The Net remains a great place for consumers to research products before buying them at brick-and-mortar outlets, such as auto dealerships. "Dining out will never be replaced online," she says.

The Census Bureau began tracking online sales in fourth-quarter 1999, when Internet retail sales totaled just under $4.5 billion. Then, E-commerce retail sales represented 0.6% of total retail sales. Census Bureau data is seasonally adjusted; first-quarter 2005 figures are preliminary and fourth-quarter 2004 stats are revised.

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