Online Retailers Rack Up Record Holiday Sales

ComScore says Internet sales jumped 43% during the six-week holiday season and will exceed $11.7 billion for the year.
Online retailers have record sales to celebrate this season. E-commerce sales jumped 29%, from $9.08 billion to $11.72 billion from last year to this year, a market research firm says.

ComScore, which follows 1.5 million Internet users' spending activities, said Monday that online retail spending reached $950 million compared with $670 million a year ago, a 43% increase. Those Nov. 1 to Dec. 26 figures don't include online travel or auction statistics, comScore said.

Among other factors, online shoppers increasingly turned to the Internet to avoid crowds and bad weather, said Graham Mudd, a comScore Networks analyst. "Snowstorms definitely influenced online sales," he said. "Online sales were up significantly over the average on the weekend of the big snowstorm."

Mudd said catalog companies tended to do well in Web selling initially because they understand how to sell in an environment in which consumers can't directly see or touch the products they want to purchase. But as Internet sales catch on, they are drawing sales away from virtually all retail outlets, including catalogs.

"Categories such as gift certificates and flowers were standouts, thanks to the ability to send such gifts purely online or with same-day delivery," said Dan Hess, comScore senior VP.

New categories also began to emerge, as Web users become more at home with online shopping. The new categories include furniture, home and garden, and jewelry and watches. Media products also have been moving well among online shoppers--DVDs, CDs, and computer software.

In an annual online shopping report on E-spending, Goldman, Sachs, Harris Interactive, and Nielsen/NetRatings were even more optimistic, maintaining that online shoppers this year spent $13 billion, a 46% increase over the year-earlier period. The report doesn't include online auction data.

The E-spending report said that "product categories for apparel, video/DVD, consumer electronics, toys/video games and books continue to be popular so far this season." The report said that online purchasing of apparel and clothing was up 35% and book sales up 33% while consumer electronics were up 12%, reaching $1.4 billion. Sales of toys and games rose 27% during the six-week period. The toy category was particularly dynamic as Wal-Mart entered into a price war with toy retailers, which maintain both online and bricks and mortar stores.

Lori Iventosch-James, director of E-commerce research at Harris Interactive, said online sales are having an impact on brick-and-mortar retailing. "The increased reliance on Internet retailers is having a noticeable impact on traditional retail outlets," she said. "With extended shipping deadlines from online retailers, we expect this trend to continue as people want to avoid the late shopping crowds."

Nielsen/NetRatings' senior analyst Abha Bhagat argues that online shopping doesn't represent a disruptive technology, but rather "another mainstream channel through which retailers reach out to customers." is also riding the year-end sales boom. The online retailer said it logged a one-day sales record over the holidays when it conducted the sale of 2.1 million items--one sale every 24 seconds.