In the lazy days of summer, online retailers are already preparing
feverishly for what they hope will be the biggest holiday shopping season
ever on the Net.
Forrester Research, which
says online sales to consumers in the last quarter of 1997 hit $1
billion, thinks the numbers might double for the last three months of 1998.
Even $3 billion is not out of question, says Kate Delhagen, director of
Forrester's online retail research service.
Scott Smith of Current
Analysis doesn't do numbers, but he thinks doubling 1997 holiday sales
is entirely reasonable.
"Particularly as folks like Macy's enter
the picture, they can quickly add to [holiday revenues]," said
Delhagen, who expects the Macy's online store to have more than 250,000 items
for sale by the holiday season. "The booksellers will be extremely aggressive--we're
talking about a very big quarter."
Part of the optimism about online holiday sales is based on consumer
Christmas sales of personal computers last year, plus falling PC prices
since then. Smith jokes, for example, that dirt-cheap prices have him
mulling a PC under the Christmas tree for his son, now two months old.
"Last year we were in the early adopter phase," said Genni Combes, Internet
retail analyst at brokerage Hambrecht &
Quist. "Now it's going to hit the mainstream in terms of consumers
getting comfortable on the Net."
Online merchants are already well into their holiday preparations, which
include a little shopping of their own. This week, Amazon.com acquired the Junglee database-driven shopping service, a logical
companion to its online music store, expected to debut by year's end. The
Junglee Shopping Guide, which makes it easier for shoppers to find items on
the Net, has more than 15 million items in its database.
Amazon is madly hiring customer service reps to assure good service for
Christmas, Combes added.
Forrester's Delhagen sees Hollywood Entertainment's July 31 purchase of Internet video store Reel.com as another example of holiday preparation.
Hollywood Entertainment runs video-rental chain Hollywood Video in
the physical world.
In June, Yahoo paid $49 million
for Viaweb, a Web storefront hosting
service that has been rechristened Yahoo
Store. In an interview then,
Yahoo chief operations officer Jeff Mallett said the goal was to be ready
for the fall shopping season.
eToys is hoping for a big autumn, with chief executive
Toby Lenk deciding to skip the giant fall Comdex computer trade show to
stay home and help the elves in his workshop. Toys 'R' Us is girding up for
the holidays, too.
One reason Net retailers are focused on Christmas has nothing to do with
1998 sales: they are counting on new customers this fall to return next year and beyond.
"Amazon.com already has 3 million customers, and I wouldn't be surprised if
it adds 2 million more by the end of the year," said H&Q's Combes. The online
book merchant said 40 percent of sales come from repeat customers, so new
book buyers for Christmas should mean jollier revenues well into 1999.
Other Net retailers hope Santa will bring them such loyal gift buyers, too.