E-tailers revived by throngs of holiday shoppers

Shoppers are buying gifts online in unprecedented numbers this year, putting 2000 on track to be the best holiday season ever for e-tailers, according to new research.

Greg Sandoval
Greg Sandoval Former Staff writer
Greg Sandoval covers media and digital entertainment for CNET News. Based in New York, Sandoval is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at @sandoCNET.
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Shoppers are buying gifts online in unprecedented numbers this year, putting 2000 on track to be the best holiday season ever for e-tailers, according to several studies, surveys and reports released Thursday.

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Internet research companies Jupiter Media Metrix, Gartner and PC Data all reported that so far, this is the most successful holiday season ever for e-commerce Web sites. While some data in the various studies differ, exact figures shouldn't matter to e-tailers, as many of them are still licking wounds from an ongoing shakeout that forced hundreds of companies out of business.

What matters is that e-commerce is hot again: Sales are up, consumers consider online shopping convenient, and analysts are ballyhooing the industry again.

"Slowly but surely, a migration toward Web shopping is occurring," said PC Data analyst Cameron Meierhoefer, "especially for online consumers who look to the Web as an opportunity to beat the holiday rush."

Jupiter said in its Holiday 2000 report released Thursday that the number of people visiting online retail sites during Thanksgiving week was up 40 percent from last year.

Nielsen/NetRatings, a company that tracks traffic to Web sites, estimates that Amazon.com was the big winner in drawing customers during the first four weeks of the holiday shopping period, logging nearly 54 million visitors.

Online grocer Webvan said it saw a 56 percent increase from last year in the amount of orders taken at its Oakland, Calif., operations during the three days before Thanksgiving.

And consumers say they plan to step up their online buying. PC Data found that online shoppers plan to buy nearly half of their holiday gifts at a Web store. Research company Gartner, in its survey, talked to shoppers who said they would spend 43 percent of their holiday budgets online.

"I ordered presents for my father, mother and brother online and got everything delivered right to my front door," one person said in a message posted on FatWallet.com, a site that helps people find bargains on the Web. "I hope it keeps going good for e-tailers so I can keep doing this year after year. It's much easier than driving to the mall, fighting traffic, finding a parking spot, dealing with crowds?."

But financial services group Ernst & Young found a much lower estimate. Its report said online consumers planned to buy 29 percent of their gifts online.

Of those who said they intend to increase their e-commerce spending, 62 percent said they will do so to save time, according to Ernst & Young. Other reasons shoppers gave for buying online this year was to avoid overcrowded malls and to save money on gasoline.

However, not all the news was uplifting for e-tailers.

Jupiter Research, which is owned by Jupiter Media Metrix, found that 44 percent of e-commerce company executives surveyed expressed concern about the preparedness of their store's infrastructure. They worried about whether sites could withstand surges in traffic or fulfillment systems could help goods be delivered on time. These types of problems plagued e-tailers last year during the holiday season.

Already this year, Webvan, Amazon and BestBuy.com have suffered site outages or slowdowns brought on by the holiday shopping crush.

More sobering for many companies is the threat of having a poor holiday season. Analysts are expecting a new round of closures this spring when companies report their fourth-quarter earnings.