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BizReport : Research : December 27, 2006

Social Networkers Boost Holiday Spend 26%

As the holiday shopping season winds down, it looks as if social networkers helped to boost spending by 26% over 2005 numbers. Excluding travel and auction sites, U.S. consumers spent $21.6 billion from November 1 – December 20, 2006.

by Kristina Knight

According to a report from comScore, high-ticket items like jewelry (66% increase), video games (65% increase) and gaming consoles/accessories (54% increase) helped to boost online spending this holiday season. Jewelry was the largest growing item this holiday season. One trend that may have sparked the increase was the interest in social networks, which drove sales of many of these high-ticket items, according to a study from Compete, Inc.

More consumers trust the feedback from social networking sites than any other information source. Hitwise tracked online retail traffic and found that about 6.2% of retail traffic was from social networking websites. Social networks only accounted for 2% of retail traffic in 2005.

Niche e-tailers are also boosted by social networks, according to IDG. "It's the long-tail idea of e-commerce allowing for a proliferation of products from market niches," said Joseph P. Bailey, research associate profession or decision and information technologies at the University of Maryland (via IDG). "This allows shoppers to find exactly what they want."

Tags: online revenue, online shopping, social networking

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