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It's a happy holiday for e-tail sales

Though many companies have not released official results, e-tailers appear to have gotten through their busiest time with few problems and solid sales to boot.

Margaret Kane Former Staff writer, CNET News
Margaret is a former news editor for CNET News, based in the Boston bureau.
Margaret Kane
5 min read
Harry Potter has made more than a few people happy lately. Retailers say the boy wizard--along with video game consoles PlayStation 2, GameCube and Xbox--helped boost holiday sales and bring online shops a strong finish to what many saw as a precarious holiday season.

Yahoo reported an 86 percent jump in sales volume between Thanksgiving and Christmas compared with last year, and BizRate, a comparison shopping site, said Wednesday that online retail sales this season are up about 36 percent.

Harry Potter items, video games and consoles, digital cameras, and laptop computers were among the top sellers for retailers, which are breathing a collective sigh of relief now that the holiday season has mostly passed with few problems and strong sales despite the recession and the Sept. 11 attacks.

"Anything with Harry Potter's name on it did well," said Amazon.com spokesman Bill Curry, who said other popular items were John Grisham's "Skipping Christmas," "Shrek" and the "LeapPad," an electronic book for children.

Retailers had strong sales right up to the Christmas holiday, in part because shoppers took advantage of last-minute shipping options, online gift certificates or the relatively new notion of buying goods online but picking them up in person at a nearby store.

BizRate reported that of the $6.4 billion in online sales from Nov. 19 to Dec. 25, last-minute shoppers bought $54 million worth of goods on Christmas Day--up 26 percent from last year. That's good, but not as strong as the doubling of sales that some market watchers noted from 1999 to 2000.

As in years past, customers say they like the convenience of buying online, and analysts note that there are ever-increasing numbers of people online, which boost the online shopping figures.

"You'd have to get in and out of your car 50 to 100 times to find certain items," said Gina Accetta, a shopper who did about 90 percent of her holiday buying online this year. "People laugh at me all the time. But whenever they complain about shopping, I say I just click, click, click."

Gartner analyst Adam Sarner says consumers and retailers will rely on the Web as one of many channels that can be used to interact with each other.

see commentary

This good news for online retailers comes amid mostly gloomy reports from U.S. retailers, who in general were seeing sales slip because of a depressed economy. U.S. retail sales from Dec. 1 through Dec. 22 fell 4.5 percent from a year ago, Instinet Research said Wednesday.

On Wednesday, the e-commerce optimism spread to Wall Street, with Yahoo up 84 cents, or more than 5 percent, to $17.51; e-tailer Amazon.com up $1.27, or nearly 13 percent, to $11.10; and eBay up $2.53, or nearly 4 percent, to $66.34.

Those gains didn't advance significantly on Thursday. By the close, Yahoo was up 26 cents to $17.77, and eBay was down 17 cents to $66.17. Amazon ticked down 50 cents to $10.60.

Ben Strong, a production manager at Yahoo, said the Sunnyvale, Calif.-based company beefed up its shopping site for the holidays by adding brands such as Sony and Gateway to its lineup of merchants who sell through its site. Yahoo also integrated its auctions, classifieds and warehouse areas into its shopping site. The result, Strong said, was a more enticing and easier-to-use shopping area.

"Consumers are becoming more and more comfortable shopping online," Strong said.

Doubts early on
Analysts and retailers had expressed some doubts about how the 2001 holiday season would pan out. The slumping economy, in addition to post-Sept. 11 issues, made them cautious.

"We were nervous. We knew there would be more buyers, the traffic patterns were clear and we knew people are spending more online," USB Piper Jaffray analyst Safa Rashtchy said. "The concern is, 'If the economy really tanks, will people just totally shut their online spending?' But it didn't get that bad."

Although many stores have not yet reported official holiday sales figures, there have been indicators of better-than-expected results.

E-commerce sites were some of the most popular on the Web in November, according to new figures released Wednesday by Jupiter Media Metrix that ranked Amazon and eBay as the seventh- and eighth-highest trafficked sites for the month.

Lehman Brothers analyst Holly Becker called the traffic figures "encouraging."

Many online retailers took the Sept. 11 concerns into account. For example, people traveling by plane who were used to taking their gifts with them were more likely to ship them instead, particularly since airports were advising people that they would have to unwrap gifts for inspection. As shoppers looked to avoid the hassles of shipping and mailing gifts and cards, several online retailers said gift certificates were more popular this year, as were online greeting cards instead of the traditional mailed cards.

At Amazon, shoppers used last-minute shipping options to make sure gifts arrived in time for the holidays, Curry said.

"It's a sign that people either weren't traveling or they knew they couldn't get oodles of gifts on the plane, so they took advantage of having Amazon wrap and ship for them," Curry said.

Phoenix resident Rob Kessel said both cost and convenience had him shopping online this year. Kessel said he bought books at Barnes&Noble.com over the weekend for several friends; not only did they arrive in time for Christmas, he said, but it cost the same as if he had bought it them in a store.

"All in all, it was great way to go," Kessel said.

Gains for e-tailers of all sizes
At Amazon, last-minute shopping meant the average selling price of electronics grew from $158.24 during the week of Dec. 10 to $218.26 during the week of Dec. 17, Rashtchy said. With strong electronics sales offsetting lower overall prices, Rashtchy said he expected Amazon to meet or beat his revenue target of $1 billion for the fourth quarter, and is maintaining an "outperform" rating on the stock.

Even some smaller online retailers seemed to have benefited during the holiday season. RedEnvelope said Wednesday that its holiday sales nearly doubled from a year ago and boasted that it had shipped its one-millionth gift on Dec. 14.

Many companies pulling out all the stops to get sales any way they could used their Web sites to get people to come in to their brick-and-mortar stores. Amazon, Circuit City, Kenneth Cole and Fry's Electronics were among the retailers that offered online gift certificates or newspaper promotions that were only good in their stores and could not be used online.

Now, in the post-holiday shopping rush, big discounts are retailers' favorite tactic as businesses try to clear inventory before the end of the year. Yahoo said Wednesday that it was launching a post-holiday sale center with discounts of up to 50 percent to 75 percent off brands including Eddie Bauer, Banana Republic and Old Navy.

Analysts have said they expect online holiday retail and travel sales to reach $11.9 billion this season, up 11 percent from last year. Though this is an increase, it indicates a leveling off from previous years. In 2000 sales were up 54 percent from the year before, and up 125 percent in 1999.

News.com's Greg Sandoval contributed to this report.