Online merchants say online holiday shopping boomed, but
analysts say the real challenge lies ahead--turning holiday shoppers into
"The real challenge to merchants is to hold onto those customers," said
David Baltaxe, e-commerce analyst with Current Analysis. "What do they
have to do to keep them coming back as repeat customers? That will be the
real challenge of next few months."
"We thought sales would drop off around the 20th [of December], but until
the 22nd, we got orders that we thought were gifts,'' said Jonathan Morris,
executive vice president of brand-name clothing discounter Bluefly. "Orders over the weekend
probably went back to our early to mid-November level,'' which still is
better than the company expected, he said.
But now the real work starts for cybermerchants--getting the droves of
first-time shoppers to return to the Net to make more purchases. America Online, for example, has seen more
than 1 million new shoppers this holiday season, and its stock soared today.
While some Net retailers are "wondering if the bubble will burst," Baltaxe
believes the savviest ones will use the data collected over the holidays to
convert holiday shoppers into year-round buyers.
Some online retailers immediately shifted into retention mode the day after
Christmas, posting inventory-cutting prices. AOL launched a Mega Clearance
Sale site on Christmas Day, and Bluefly is considering online gift
certificates next year, which could extend the buying season. Some online
merchants offered "Internet-only" sales.
While some conventional stores are reporting lower-than-expected sales,
online merchants and analysts say they expect larger than expected results.
Jupiter Communications isn't updating its
$2.3 billion estimate on holiday shopping, but Forrester Research thinks its $3.5
billion estimate for the fourth quarter, including online travel booking,
"All the other surveys confirm that at least 2.1 million households
shopping online for the first time in the fourth quarter, and that easily
gets to the $3.5 billion that we projected," said James McQuivey, Forrester
senior analyst. AOL said earlier this month that shoppers were spending
over $250 on average.
SkyMall, the nation's largest seller of
goods through catalogs on airplanes, said today its Internet sales for the
fourth quarter tripled to $1 million, from $300,000 a year ago, and
full-year Internet sales rose sevenfold. It had 15 million hits, for
December, more than three times the hits from a year earlier. SkyMall's
stock soared today, up 185 percent to 35.8750 in afternoon trading.
Sharper Image, a retailer of unusual
electronic toys, said last week
that sales through its Internet site rose sixfold from December 1 to December 21.
That compares with a rise of 9 percent in the same period for its stores
open at least a year, the company said.
Bloomberg News contributed to this report.