Posts tagged ‘Statistics’

Cyber Monday - Update

Good news! According to, Cyber Monday sales were up 15% over last year. In fact, spending for the holiday shopping weekend appears to have gone up 12% over last year, according to the survey. This increase helps recapture some of the overall loss on the month. Prior to the Thanksgiving-Cyber Monday shopping spree, online sales were down 4% on the month. The month, including December 1, will wrap up with only a 2% decline. This is still a seven month disappointing downward trend in online sales. provides a similar Cyber Monday picture. While they do not report actual sales, they report that Cyber Monday generated a 10% increase in Web traffic. Nielson calculates the Holiday eShopping Index. The Holiday eShopping index is based on a survey of 120 representative online retailers, and traffic to these cites represents a barometer of online activity.

Interestingly, beauty was the fastest growing product category in the index on Cyber Monday 2008 with a unique audience growth of 151%. (This is a stark change from Black Friday’s traffic leader of consumer electronics at 219%.) This was followed by toys/videogames with a unique audience growth of 112%. Of the top 10 online retail destinations, Amazon, Sears, Best Buy and Netflix showed the most traffic growth (25%, 58%, 51%, and 42%, respectively) over Cyber Monday 2007, while Wal-Mart saw 0% and eBay saw a 2% decline in traffic. Just four days earlier on Black Friday, the top destinations were Wal-Mart, 106%, Target, 136%, Best Buy, 196%, and Circuit City, 352%.

Another index to watch during holiday shopping is Chase’s Paymentech Pulse Index. It paints quite a different picture for Cyber Monday. This index monitors the daily activity of 25 of the largest 150 Internet retailers through data taken from actual “transactions crossing Chase Paymentech’s global processing platform”. This index tells us that on Cyber Monday 2008 sales volume increased by less than 1/2% from last year, but transaction counts were up 14%. Essentially this means that while more transactions were made, much less was spent per transaction than in the previous year. In fact, the average dollar spent per transaction was down 12 percent.

Data Sources:

“Welcome to the 2008 Chase Paymentech Pulse Index: What will this year’s online holiday shopping bring?”



Press Release:, E-Commerce Spending Jumps 15 Percent on Cyber Monday to $846 Million, the Second Heaviest Online Spending Day on Record, December 3, 2008

Cyber Monday – The Online Response to Black Friday

Today is Cyber Monday – The e-Business version of Black Friday. Cyber Monday traditionally falls on the Monday following Black Friday. It is the day when many people who are presumed to be working are huddling behind their computer screens looking for the best deals to buy online. The term Cyber Monday was apparently coined by, the online arm of the National Retail Federation, which is the trade group for online retailers, in 2005, when it was noticed that people were continuing shopping online after returning to work on the Monday following the Thanksgiving break. survey finds that 13 million more Americans (84.6 million total) plan to shop online on Cyber Monday this year over last year. 72.8 million of them will shop from work (representing 55.8% of workers with Internet access). This is up from 44.7% in 2005.

Of retailers, 83.7 percent will have special marketing plans/promotions on Cyber Monday, up 72% from last year. The most popular plans for increasing online sales are specific deals/promotions (38.8%), email campaigns (32.7%), one-day sales (24.5%), and free shipping (22.5%). Find the full report and historical data at

Even so, Cyber Monday is not the busiest online shopping day of the year. Traditionally, the busiest days are in mid-December as buyers rush to get those last minute hard-to-find gifts while there is still time for delivery before Christmas.

Some problems arise on Cyber Monday including sites slowing down or simply crashing as business picks up. Businesses that aren’t prepared for the outcome of successful marketing campaigns may experience these problems. On Black Friday 2008 online shoppers experienced these problems even at large online retailers such as and was actually down for a good portion of the day (Worthen, 2008). Not forgotten is the “network configuration issue” that shut down “tens of thousands” of Yahoo Small Business online merchants from 6 a.m. to 1 p.m. on Cyber Monday in 2007 (Choney, 2008). Firms must also be able to handle the business of successful campaigns. Many parents will remember when Toys R Us failed to deliver by Christmas in 1999 on many orders placed during December of that year.

Online holiday sales are expected to be flat this year according to Online sales declined 4% during the first 23 days of November when compared with the same time frame in 2007, following a trend of declining growth rates in the six previous months (15%, 12%, 11%, 8%, 6%, 5%, 1%). According to, a market-research firm, online sales in November-December of this year are expected to remain flat compared with the previous year – a stark change for online retailers accustomed to double digit gains (Lawton 2008). Even so, reports online spending this year was up six percent on Thanksgiving Day and up one percent on Black Friday over last year, an encouraging sign for online retailers. 11% of online Black Friday sales came between the hours of 4:00 a.m. and 8:00 a.m. – time traditionally spent standing in line at stores like Best Buy, Toys R Us and Walmart. Nearly 50% of online sales occurred between 8:00 a.m. and 4:00 p.m.

The declining growth rates in online shopping sales over the past six months are consistent with the slowing U.S. and global economies. Online retailers are not immune to the problems plaguing brick-and-mortar firms. finds that shoppers are increasingly concerned about unemployment/job security and financial markets conditions. Shoppers making less than $50,000 per year are actually spending 3% less online than last year while those making between $50,000 and $100,000 are only spending about 1% more online. According to another study by, 47% of online consumers are buying fewer gifts this year and 46% are buying less expensive gifts. These same online buyers suggest they will respond more to coupons, free shipping, and comparison shopping.

Only three hours of Cyber Monday left. I still have some shopping to do!

Data Sources and Bibliography, comScore Forecasts Flat Growth for 2008 Holiday E-Commerce Spending, November 25, 2008, Accessed December 1, 2008, U.S. Retail E-Commerce Growth Slows to 1 Percent in October as Concerns about Inflation, Jobs and the Financial Markets Cause Consumers to Curb Spending, November 18, 2008, Accessed December 1, 2008., Black Friday Sees $534 Million in E-Commerce Spending, Up 1 Percent Versus Year Ago, November 30, 2008, Accessed December 1, 2008., Site created by when it came up with the “Cyber Monday” marketing scheme. It is a clearinghouse of sorts for holiday shopping sales of online firms., A Gimmick Becomes a Real Trend, BOB TEDESCHI, , New York Times, November 26, 2007, Accessed December 1, 2008, Getting ready for ‘Cyber Monday’: Despite projected drop in Web holiday sales, sites may be busy with lookers, By Suzanne Choney, November 30, 2008,, Accessed December 1, 2008, Survey Finds 85 Million Americans to Shop on Cyber Monday, Up From 72 Million Last Year– Unveils Select Deals of the Hour—, Accessed December 1, 2008., Retail Sites Crash as Shopping Season Opens, Ben Worthen, November 28, 2008, 4:49 pm, Accessed December 1, 2008, Online Shopping to Plateau As Slump Hits Cyberspace, CHRISTOPHER LAWTON, NOVEMBER 26, 2008, Accessed December 1, 2008.

Building a Bridge to Everywhere – Closing the Global Digital Divide

I wrote in an earlier post about the digital divide – in particular, it was about who is buying online. Now I ask, “What is the global digital divide?” And is the gap closing?

What is the Global Digital Divide?

The global digital divide represents the differences in internet and other telecommunications access and usage across countries. The global digital divide encompasses two concepts. First, there is a divide in access and usage across definable groups within countries, and second there is a divide in access and usage across countries themselves.

Individual country statistics routinely show an intra-country digital divide. In a Pew Internet and American Life study and nearly all the countries surveyed in a 2008 OECD study, internet use within OECD countries decreases with the age of the user, increases with the education of the user, and increases with the income of the user. Globally, households with children are more likely to use the internet and urban/suburban users more likely to have access than rural users. And in many countries men access the internet more than women. This same study also found that internet access varies with firm size. Larger firms (firms with more than 100 employees) are twice as likely to have internet access than smaller firms.

According to Internet World Stats, the latest number of world internet users in October 2008 is 1,463,632,361 which represent 21.9% of the world population. I have reproduced some of this data in Table 1. Between 2000 and 2008 the number of users grew at a rate of 305%. The highest percentage of users per population (known as “internet penetration”) can be found in the North America, 73.6%, and the lowest percentage of users can be found in Africa, 5.3%. Asia may have the largest number of total users of the Internet, but access is still largely concentrated in the higher income urban areas (Kuang 2008). However, the fastest rate of growth of users is in the Middle East. While the Middle East only represents 2.9% of world usage, its rate of growth since 2000 is an astounding 1,175.8%. A similar pattern can be found in Africa where usage by only 3.5% of the world’s users has grown at a rate of 1,031.2%. While these numbers seem staggering , when you begin with a low number of users initially, even a small increase in the number of users can lead to big growth rates.

An enlightening image of the digital world, shown here in Figure 1, illuminates the relative densities of Internet connectivity across the globe. The U.S. and Europe are literally lit up with connections, while Africa and parts of Asia are dark. The map illustrates connections around the world, but this is not usage. In areas such as Africa, the density is low but usage may be higher because many people may be using a single connection (e.g., in an Internet Café) (Rogers 2008).

World Connection Density

Figure 1: World Connection Density, Image provided courtesy Chris Harrison, Carnegie Mellon University

Is the global digital divide closing?

Countries with low penetration rates can expect to see bigger gains in the global digital divide. The change in the digital divide “pie” is represented in Figures 2 and 3. Perhaps it is not best to treat the global digital divide as a pie of a certain size such that gains in one area represent declines in others. Statistically, the global digital divide will naturally decline as internet access in developed countries gradually grows closer to population limits (i.e., as penetration rates draw nearer to 100%). It is best to view the pie as growing, and a reduction in the digital divide would see the pie becoming closer to representing population differences. Increasing access in developing countries need not take away from the access of current of users; however, it can, as countries deal with such issues as the bandwidth sharing (Kuang 2008) and the current IPv4 address shortage (OECD 2008).

Figure 2:  Source Internet World Stats,

Figure 2: Source Internet World Stats,

Figure 3:  Internet World Stats,

Figure 3: Internet World Stats,

What causes the global digital divide?

According to recent studies (e.g., Chinn and Fairlie 2007, OECD 2001), there are several major contributors to the global digital divide including differences in income, literacy, infrastructure, and the regulatory climate. As expected, the lower income developing countries have lower access to the Internet. In countries where people worry about from where their next meal will come, internet access is less likely to be their major concern. In these same countries, illiteracy also complicates internet usage. When the internet is accessed, users must share a very low bandwidth. As a result, text based internet pages are the most likely to be successfully accessed. The irony is that these pages often cannot be read because of low literacy levels and translation difficulties. These users are deprived of the audio and video components of the web that would be most beneficial to them due to low bandwidth. “The lowest broadband speeds available to affluent countries, such as Japan, Singapore and South Korea, are faster than the maximum broadband speeds in Bangladesh, Cambodia, Laos and Tonga.” (Kuang 2008) One OECD study shows that a single user in Japan has access to more bandwidth than the 45 countries with the lowest bandwidth combined (OECD, 2004).

In the past, the focus of reducing the global divide centered on expanding landlines to increase dial-up access. In one 2001 OECD study, expanding broadband via cables was the major emphasis for expanding access. In just a few years “those previously described as ‘haves’ as dial-up users would be considered ‘have nots’ for the emerging broadband divide.” (OECD 2004, pg. 7) In OECD countries, broadband subscribers increased by 11 times between 2000 and 2006 (OECD 2008, pg. 11). Expanding broadband into developing countries is still a prominent interest of telecommunications companies and governments. However, while the positive externalities in terms of productivity and economic growth of laying submarine and land fiber optic cables are potentially profound, governments often view internet access as a public good. This creates issues as to who should pay for creation, access, and even repair of the cables. (e.g., Waltner, 2006, and Johnson, 2008). A variety of public and private telecommunication structures has developed connecting to one vast network. Public policy analysts fear that monopoly pricing and limited access by private firms will continue to isolate vast geographical areas (e.g., see CIPESA, 2006). One OECD (OECD 2004) study suggests that the solution to the global digital divide is through liberalizing telecommunications markets while keeping a sound regulatory framework.

How can the global digital divide be reduced further?

Studies of the global digital divide often focus on both internet access and pc availability. Moves to expand laptop and pc availability to developing third world countries will help increase access to broadband and reduce the global digital divide. However, the popularity of mobile communications in developing countries may suggest that satellite technology is the medium of the future. In 2002, the number of mobile phones outnumbered fixed phone lines globally. (Euromonitor International, 2007) Mobile phones are less expensive for developing country citizens and providing access is cheaper for firms than building or repairing landline infrastructure. It is therefore easier to use satellite transmission to extend access in these areas. The US, UK and Italy are leaders in mobile Internet penetration with 15.6 percent of mobile subscribers in the US, 12.9 percent of subscribers in the UK and 11.9 percent in Italy who actively use the mobile Internet. (Nielson Mobile 2008) A Nielson report in July 2008 finds that while the US leads in overall mobile internet usage (of total users), other nations, such as Russia, Brazil, and India, are now using mobile devices as the primary mechanism for getting online. Mobile phone use in the Sub Saharan Africa grew 67% in 2005 and currently outnumbers North American customers. (Waverman 2007) A company called O3b Networks, backed by Google, Liberty Global, and HSBC Principal Investments, is currently producing a satellite-based infrastructure to bring high speed internet access to developing countries in Asia, Africa, Latin America and the Middle East by late 2010. This company faces obstacles similar to those facing broadband providers, such as various regulatory structures, particularly government owned telcos, that control prices of access in the countries that seek it. (Cherry, 2008)

Concluding Thoughts

As I mentioned above, the global digital divide will naturally tighten as user rates become closer to population levels. This requires coordination via companies that produce the broadband and satellite access, telcos and ISPs that provide the access to the consumers, and governments. Provision of access alone will not close the divide. The cost of that access for the consumers, their income, their literacy level, and their willingness to learn new technologies are also factors. There are many groups seeking to reduce these burdens and provide the tools necessary to equalize access to these markets, including those that volunteer funds and equipment (e.g, One Laptop Per Child program and other programs), accords between governments, and cooperation between private companies.

Bibliography and Selected Readings or Sites:

Kuang, Peng. “Asia picks up broadband fast, but poor still disconnected”, 15 September 2008,

OECD. “Internet Address Space: Economic Considerations in the Management of IPv4 and in the Deployment of IPv6” , May 15, 2008,

OECD. “Understanding the Digital Divide”, 2001,

OECD. 2004. “Regulatory Reform as a Tool for Bridging the Digital Divide”

Chinn, Menzie D. and Robert W. Fairlie. “The Determinants of the Gobal Digital Divide: A Cross-Country Analysis of Computer and Internet Penetration”, Oxford Economic Papers 59 (2007), 16-44, doi: 10.1093/oep/gp1024.

Waltner, Charles. May 31, 2006. “International undersea fiber optic cable promises much needed bandwidth to East Africa but specter of monopoly pricing threatens project’s benefits”, News@Cisco,

Johnson, Bobbie. “How one clumsy ship cut off the web for 75 million” February 1, 2008, The Guardian,

Bridging the Global Digital Divide, One Laptop at a Time, June 11, 2008, Knowledge@Wharton,

Critical Mass: The Worldwide State of the Mobile Web, Nielsen Mobile, July 2008,

Schewe, Sarah. “Nielsen reports mobile internet usage has reached ‘critical mass’”, July 18, 2008,, Accessed October 30, 2008

Mobiles, The Digital Divide, And Google, Google Tech Talks, January 12, 2007, Waverman, Leonard,

Cherry, Brett. Satellites to bring speedy Internet to developing world, 18 September 2008,

Rogers, Madolyn Bowman. Mapping the Digital Divide, Symmetry Magazine, September 2008, Volume 5, Issue 4,

Heimbuch, Jaymi. Closing the Global Digital Divide: Technology for Developing Countries, Central Coast, California on 10.15.08,

CIPESA. “The Eastern African Submarine Cable System (EASSy): The Open Access Challenges and Debate”, Collaboration on International ICT Policy for East and Southern Africa, May 2006,

Interesting Related Images:

Submarine cable map:

Damaged and proposed cable:

Large cable ships that lay and repair fiber optic cable

The Global Digital Divide, Euromonitor International,, 2007

World Internet Connection Density, Chris Harrison,

Global Traffic Index – how fast data moves around the world.

Visualize African Connectivity with Physicist Les Cottrell.

Who Is Buying Online?

It is time for another post with some economics of selling online statistics. Today’s question is “who is buying online?”

A recent PEW Internet and American Life survey shows that 75% of all U.S. adults in 2007 are using the Internet. Among users are 74% of adult women and 75% of adult men. The numbers are predictably up from the 2000 survey which showed that 46% of adult women and 51% of adult men were online. Usage has increased from 2000 to 2007 from 50% to 76% of white adults, 34% to 56% of black adults, and 43% to 79% of English-speaking Hispanics. As expected, internet access increases with age, income, and education.

The statistics on U.S. internet access suggest that there is a “digital divide”. While access has increased in all groups :

  • Young are more likely to be wired than old. (18-29 year old 92% to 65+ 37%)
  • Higher income more wired than lower income. (<$30,000 61% to $75,000 93%)
  • Highly educated more likely to be wired than less educated. (
  • White (76%) and Hispanic (79%) Americans are more likely to be wired than African-Americans (56%)
  • Suburban (77%) and urban (77%) Americans more wired than rural (64%) Americans
  • Full-time (58.6%) employees are more wired than part-time (12.5%) employees.
  • -
    So what are Americans doing online? According to the study by PEW Internet and American Life, the more popular activities (reported by greater than 70% of users) include reading and sending email, searching for information on products or interests, getting directions or maps, and getting weather reports, news or travel information.

    Of particular interest to this course is that an estimated 78% of users research a product or service before buying it. 68% say that they buy products online. The demographics of those who buy products online are different than internet users in general. For example, of folks who make purchases online :

  • Buyers online are 74% White while only 10% Black and 10% Hispanic.
  • Buyers are more likely to be between 30-49 (46%) followed by 18-29 (26%) and 50-64 (23%).
  • Buyers tend to be more highly educated with 39% having at least some college and only 6% without high school diplomas.
  • Buyers seem to be fairly evenly distributed across income groups (however, a good percentage of buyers would not report that statistic).
  • Buyers are more likely to be from suburban (50%) areas rather than urban (25%) or rural (15%) areas.
  • 77% of online buyers have broadband access.
  • -
    The study reports that the number of online users either buying or researching products online has roughly doubled since 2000.

    To catch up on some world internet statistics, see World stats show that the largest number of Internet users come from Asia, followed by Europe. However, internet penetration (users/population) is highest (73.6%) in North America (including Canada and Mexico) and lowest (5.3%) in Africa.

    World statistics also show a digital divide. In nearly all the countries surveyed in an OECD study (pgs. 21-23), internet use decreases with the age of the user, increases with the education of the user, and increases with the income of the user. Globally, households with children are more likely to use the internet.

    Sources and More Information:, Demographics of Internet Users, October-December 2007 Survey.
    MRI CyberStats, Fall 2007,, Internet Access and Usage in the U.S., Fall 2007., pg. 8, Online Shopping, Pew Internet & American Life Project, February 13, 2008., Most Popular Internet Activities, Pew Internet & American Life Project tracking survey., OECD Study, The Future of the Internet Economy: A Statistical Profile, OECD Minitsterial Metting, Seoul, Korea, June 2008.

    Some E-Commerce Statistics

    In today’s post I want to pull together a few statistics regarding online selling in the U.S. Unless otherwise stated this data comes from two reports: U.S. Department of Commerce Quarterly Retail E-Commerce Sales Report ( (1st Quarter 2008) and U.S. Census Bureau E-Stats (, May 17, 2008.

    What makes selling online different than selling through traditional channels? The U.S. Census Bureau defines e-commerce sales as “sales of goods and services where an order is placed by the buyer or price and terms of sale are negotiated over the Internet, an extranet, Electronic Data Interchange (EDI) network, or other online system. Payment may or may not be made online.” Thus, e-commerce is the sales of goods and services that take place in a virtual (or electronic) marketplace. By this definition, e-commerce sales in the U.S. represented 31.2% of manufacturing shipments and 2.7% of retail trade sales in 2006.

    There are several types of transactions that occur online:
    • Business-to-Business (Examples might include GM buying auto parts from a supplier.)
    • Business-to-Consumer (Examples include or
    • Consumer-to-Consumer (Examples include and other auction sites.)

    The bulk of e-commerce is conducted as business-to-business (B2B) e-commerce. According to the U.S. Census Bureau E-Stats report, B2B e-commerce totaled $2,716 billion representing 93% of online sales in 2006. Most of the remaining 7% was in the form of business-to-consumer (B2C) e-commerce. In 2006, B2C e-tail (electronic retail) sales totaled $107 billion dollars. In 2007, B2C e-tail sales totaled just over $127.7 billion or 3.2% of total retail sales.

    Between 2005 and 2006 (the most recent data available for total e-commerce in the U.S.), e-tail sales grew at a 22% rate. According to the same report, over 90% of e-tail sales were from the two industry groups: Nonstore Retail and Motor Vehicles & Part Dealers. Most of those Nonstore Retail sales came through Electronic Shopping and Mail-Order Houses . This latter group includes the sales of goods from traditional retailers if they have separate Internet business units. The leading merchandise category for e-tail sales was Clothing and Clothing Accessories. Two other leading categories were Music and Videos (71%) and Electronics and Appliances (69%).

    Other selected Statistics:

    Selected industry categories (percentage of total U.S. manufacturing value of shipments devoted to e-commerce):
    • Transportation equipment (2006: 54.9%; 2001: 43.9%)
    • Computer and electronic products (2006: 31%; 2001: 17.1%)
    • Food products (2006: 28.7%; 2001: 11.9%)
    • Chemicals (2006: 31.2%; 2001: 12.4%)
    • Wood products (2006: 13.1%; 2001: 5.6%)

    Durable Goods in 2006 (50.1% percent of distribution of e-commerce revenue)
    • Largest percentage going to motor vehicles, parts, and supplies (29%)
    • Lowest percentage going to lumber and construction materials (0.7%) and Metals and minerals, excluding petroleum (0.7%)

    Nondurable Goods in 2006 (49.9% percent of distribution of e-commerce revenue)
    • Largest percentage going to drugs and druggist sundries (25.8%)
    • Lowest percentage going to groceries paper and paper products (1.5%) and farm products, raw (3.1%)

    Selected industry statistics regarding service industries (percent of distribution of e-commerce revenue):
    • publishing industries (11.8%)
    • securities and commodities contracts intermediation and brokerage (6.4%)
    • travel arrangement and reservation services (7.4%)
    • accommodations and food services (8.4%)

    Selected International Statistics and Sources

    Ecommerce sales in Latin America:
    Country | 2007 | 2006 | % growth
    Brazil | 4,899 | 3,541 | 38%
    Mexico | 1,377 | 868 | 59%
    Venezuela | 821 | 490 | 68%
    Caribbean (except Puerto Rico) | 818 | 585 | 45%
    Argentina | 739 | 619 | 19%
    Chile | 687 | 472 | 46%
    Central America | 499 | 360 | 39%
    Puerto Rico | 445 | 384 | 16%
    Peru | 218 | 145 | 50%
    Columbia | 201 | 175 | 15%
    Others | 203 | 165 | 23%

    Books, music, movies 21.4%
    Tourism and travel 16.9%
    Electronics 13.9%
    Software 12.3%
    Appliances 9.1%
    Services 7.7%
    Flowers, gifts 6.7%
    Food 4.3%
    Games 3.1%
    Spare parts 2.8%
    Furniture 1.8%

    Source: Visa Inc. “B2C Electronic Commerce in Latin America and the Caribbean: Beating All Odds.”, from Visa Predicts E-commerce in Latin America to surpass $16 billion this year, Sante J. Achille Jul 11, 2008,


    Canadian e-commerce grew 26% in 2007. E-tail sales grew 38% in 2007. E-tail sales accounted for 10% of total e-commerce activity. Source: Statistics Canada. Found on

    Some European stats on e-commerce by country (2006) can be found here:

    Annual Information Society Report,