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Santa's Sleigh Flying on Internet

Online shopping - including purchases of entertainment products - will be a clear winner this holiday season, though its growth is expected to decelerate a tad from last year's 30% spurt.

Goldman Sachs, Harris Interactive and Nielsen//NetRatings are poring over the data now to prepare their fourth annual eSpending prognostication, but it's a certainty that consumers will spend far more than the $18.5 billion in online shopping than they spent last season, they say.

That figure excludes online travel, large online corporate purchases and online auctions and is for the eight weeks that ended Dec. 26, 2003.

That figure excludes online travel, large online corporate purchases and online auctions and is for the eight weeks that ended Dec. 26, 2003.

ComScore analyst Graham Mudd said that the category of online sales of music, movies and video during the first three quarters hit $2.05 billion, an improvement of 16% from the same nine months last year. In the consumer electronics category, excluding PC peripherals, for the first three quarters sales were $2.23 billion, up 12%.

Although ComScore won't forecast sales for individual categories, Mudd expects that leading the growth this year will be such categories as jewelry and watches and other products that traditionally haven't sold well online.

He said driving the growth for all categories is the switch from narrowband to broadband, with its ease of use and always-on nature being a boon to e-commerce.

A third report, from ChangeWave Research, surveyed 1,430 mostly high earners and also determined that online shopping will be strong, as will offline and online purchases of consumer electronics products, though overall holiday spending growth will be sluggish.

Best Buy is still far ahead of Circuit City when it comes to consumers' favorite place to buy home entertainment products, while Amazon.com is a surging third-place option.

This year's biggest electronics products will be digital cameras, laptop computers and LCD flat-panel television sets, according to ChangeWave, while services that will see growth surges are Voice-over-Internet-Protocol phone services (225% from a year ago), satellite radio (183%) and HDTV (110%).

The ChangeWave report indicates that just 33% of those surveyed intend on spending more during the 90-day holiday season this year than they did last year, compared with 40% who spent more last year than they did in 2002. But the report calls consumer electronics "a pocket of strength" where 46% of those surveyed will spend more money this year than last.

Video games also are set to do well this holiday season. The Entertainment Software Assn. trade group said Monday that it has found that 47% of all U.S. adults with children plan to give video games as gifts, and 37% of Americans expect to either give or receive a game this holiday season.