Happy holidays for e-tailers

Consumers are shaking off economic woes and heading to the Net this holiday season, with a new report saying online shopping is up as much as 30 percent.

Margaret Kane
Margaret Kane Former Staff writer, CNET News
Margaret is a former news editor for CNET News, based in the Boston bureau.
3 min read
Consumers are shaking off economic woes and heading to the Net this holiday season, with a new report saying online shopping is up as much as 30 percent.

The Friday after Thanksgiving traditionally marks the kickoff to the holiday shopping season, and this year shoppers went online as well as to the mall, with Internet shopping traffic rising 18 percent Friday compared with the rest of last week, according to Internet measurement firm Nielsen/NetRatings.

Consumers spent around $195 million online on Friday alone, according to ComScore Networks, an Internet measurement firm. That number is up around 30 percent from a year ago, with the bulk of the increase coming from nontravel-related sales, according to ComScore.

"We're expecting that those folks who shop online are going to spend more (on the Web) than they did last year, and do more of their shopping online than they did last year," said Scott Silverman, executive director of Shop.org, an industry group that's a division of the National Retail Federation. E-commerce "certainly is fueling a very strong holiday season."

America Online reported that its shoppers spent $1.09 billion between Nov. 25 and Dec. 1, an increase of 26 percent from a year ago. AOL members did the bulk of their Thanksgiving-week shopping on the Web, citing convenience and a desire to beat store crowds, the company said.

"Over the years, our members have grown very comfortable transacting online, and with six fewer shopping days between Thanksgiving and Christmas this year, the convenience factor of shopping online is more important than ever," Patrick Gates, senior vice president of commerce for AOL, said in a statement.

Other shopping portal sites are seeing a pickup as well. MSN Shopping reported a 50 percent increase in traffic in November. Orders at each of the top categories on Yahoo Shopping, including computers, electronics, toys, flowers and jewelry, are up more than 20 percent, said P.K. Van Deloo, brand manager for Yahoo Shopping.

"People are looking for good values this season; the economy is still down," Van Deloo said.

Amazon.com said its customers ordered more than 24 million items between Nov. 1 and Nov. 28. The e-tailing giant didn't compare its numbers to previous years, but Deutsche Bank analyst Jeetil Patel estimated that the company is seeing year-over-year growth in the high 20 percent range for the fourth quarter.

"While we are still at the early stages of the holiday season, we believe that business trends for most e-commerce companies, and in particular, Amazon.com, have begun on a solid note," Patel wrote in a research note.

But just because consumers are finally getting comfortable shopping on the Web doesn't mean e-tailers aren't doing everything they can to lure shoppers. Promotions have been thick this holiday season, including free shipping.

"Free shipping is the most prominent example of a promotion that many online retailers have found to be critical to remove one of the greatest consumer obstacles," said Dan Hess, vice president of ComScore. "For national retailers, where being online doesn't offer a ticket out of sales tax, waiving shipping becomes a great way to grease the skids."

Hess said consumers' fears about shopping online are dissipating, a problem that had dogged e-tailers a few years ago.

"People are more comfortable and confident faster with the idea of buying online, once they've adopted the Internet," Hess said. "Much of that has to do with the stability and quality of perception that has emerged in quality names in online retail. There's Amazon and eBay, but also successful multichannel retailers--the Best Buys and Sears and Nordstroms of the world."