Print

Email story

Comment

Email editor

Online retailers see strong holiday sales

Shoppers, who like convenience and ease of bargain hunting, spend an estimated 30 percent more than last season.

By TOM ZUCCO and MARK ALBRIGHT
Published December 31, 2005

What it came down to, Diane Schroder explained, was a matter of time.

Christmas shopping had become a do-or-die game of finding parking spots, lugging bags through malls and rushing from one store to the next.

"When you're a working mom, Christmas is just maddening," Schroder, 36, said Friday from her office at Tech Data in Clearwater.

So this year, the New Port Richey woman bought nearly all her gifts online. From a David Beckham soccer jersey for her 9-year-old son, to books, video games and hockey nets for the rest of her family.

"It was a great Christmas for everybody," said Schroder, who works as an events planner.

It was especially great for online retailers, who surprised many analysts with their strong holiday showing. Consumers spent more than $18-billion online in November and December, a 25 percent increase from 2004, according to estimates by the research firm comScore Networks. And those numbers may actually be higher. Data from Nielsen/NetRatings, another research firm, estimated Web purchases totaled more than $30-billion in the period, an increase of 30 percent. Unlike comScore, Nielsen includes spending at online auction sites such as eBay.

Though firmer numbers won't be known for a few weeks, this much is certain: Online retailing is now permanently entrenched as part of mainstream retailing. About a third of all American households made at least one online purchase during the holiday season, up about 10 percent from last year. And huge numbers of conventional shoppers rely on the sites to gather information about what they are buying.

Even with those impressive numbers, online sales still represent a small fraction, about 6 percent, of all retail sales. Analysts expected a total of about $435-billion in holiday sales this year.

"The customer is a lot more comfortable purchasing online now," said Kris Kulesza, senior vice president of merchandise online for HSN Inc. "Their confidence level continues to improve."

The most popular online shopping sites, according to comScore, were eBay and Amazon, two of the biggest and oldest Internet retailers. But traditional retailers such as Wal-Mart, Target, Toys "R" Us and Best Buy also were among the top 10 retail sites visited during the holiday season.

Not surprisingly, computer hardware remained the most popular online purchase, accounting for about $4.1-billion in sales this season. But clothing and accessories jumped into a strong No. 2 this year, with about $3-billion in sales. No. 3: consumer electronics with $1.3-billion.

The growth in online sales, retail experts say, has a lot to do with the fact that most American homes have computers, and the convenience of shopping at home.

But there are also more subtle factors at play.

"When we asked when people shopped (online) during the holidays, they cited before going to bed, and before work in the morning - when most of the malls are closed," said Helen Malani, a researcher at online shopping search engine Shopzilla.com.

"And retailers have figured out that what makes consumers happy during the holidays is free shipping. It levels the playing field."

In early November, as the holiday season officially began, four out of five online retailers said they planned to offer free shipping during the season to attract buyers.

But it wasn't just finding items. The ability to be a smarter shopper also plays a huge role. Nearly 90 percent of online shoppers use the Internet to compare the prices of online retailers, catalogs and retail stores before they buy, according to Shop.org, an association for online retailers.

Their work apparently paid off. More than 70 percent of online shoppers reported they were able to find better sales and discount offers online than offline through a retail or catalog merchant.

Neiman Marcus and L.L. Bean said that for the first time, they received more orders from their Web sites than telephone orders through their catalogs.

Apprehension was another key factor. Consumers often worry their purchases might not arrive, their order will be wrong, or their credit card number or e-mail address will wind up in the wrong hands.

Those fears, apparently, are lessening.

"Whenever there's new technology, people focus on the fears," Malani said. "But the more people do it and have positive stories, those fears are put in proper perspective."

Schroder, the online shopper from New Port Richey, said that other than a small glitch with the soccer jersey, everything she ordered arrived on time, in part because she made sure to track the shipments on her computer.

But she did make a trip to a mall for gifts she wanted to buy in person.

"I ended up with seven different bags and trying to drag them through the mall," she said. "By the time I got in the car, I was hot, out of breath and needed a nap."

[Last modified December 31, 2005, 00:48:13]