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ECommerceTimes.com

Online Holiday Shopping Off to Strong Start

By Jennifer LeClaire
Nov 29, 2004 10:55 AM PT

The holiday shopping season has officially begun, and the sales results are in for the first weekend of the 2004 race for fourth quarter profits. Online and offline retailers alike have a lot to smile about.

Online Holiday Shopping Off to Strong Start

Indeed, while both brick and mortar and e-commerce outfits are reporting boom times, it promises to be a race to the end to determine which channel will dominate the holiday sales contest this year.

The National Retail Federation (NRF) reported a blockbuster weekend, with 133 million shoppers flooding stores hunting for popular electronics, clothing and music.

An NRF survey conducted by BIGresearch found that the average shopper spent US$265.15 this weekend, bringing total weekend spending to $22.8 billion. That $22.8 billion represents more than 10 percent of the $220 billion expected in total holiday sales this year.

"Retailers know that the holiday season is not a sprint, it's a marathon," NRF President and CEO Tracy Mullin said. "Black Friday weekend is just the beginning of a month-long race to the finish line."

E-Commerce Fights Back

As expected, online retailers also had a solid weekend, with nearly one in three consumers (29.3 percent) choosing to do some of their holiday shopping over the Internet, according to the NRF survey.

Specifically, Nielsen//NetRatings reported that online shopping jumped 11 percent in unique shoppers on Friday, the day after Thanksgiving, as compared to the same day in 2003. More than 13 million people visited online stores on November 26 than the previous Friday, November 19.

"Even diehard holiday shoppers that weather the Black Friday crowds at sunrise know to research the Web for product selection and price comparisons before heading out to the mall," Ken Cassar, director of client analytics, Nielsen//NetRatings, said.

"Online shoppers deluged the Web sites of their favorite brick-and-mortar stores, as well as online retail resources such as BF2004.net, which provided ad updates on Black Friday sales and promotions."

Hot E-Tailers, Hot Categories

EBay led the top online shopping destinations the day after Thanksgiving with a 5.4 million unique audience. Amazon followed with 2.6 million, while Wal-Mart Stores saw 1.4 million shoppers. Rounding out the top five sites were Target and BestBuy.com, with 923,000 and 847,000 unique audience, respectively.

The day after Thanksgiving saw toys and video games taking the largest jump, growing 152 percent in visitors at home as compared to the previous Friday, according to the Nielsen//NetRatings. Consumer electronics spiked 94 percent in traffic, while shopping comparison/portals rose 75 percent. Computer hardware/software and books/music/video rose 54 percent and 50 percent, respectively.

"The fastest growing product categories on Black Friday were in traditional gift categories that can be easily found and bought," Cassar said. "We expect to see continued growth in these areas, along with the flowers/gifts category increasing in shopping activity a bit later in the season."

Multi-Channel Approach

Gartner analyst Adam Sarner told the E-Commerce Times that what retailers will learn this holiday shopping season is that the Web is a huge influencer of offline sales.

"E-commerce is not going to replace brick and mortar stores," Sarner said. "It will compliment them. When it snows, customers will buy online and when they want it in 20 minutes they will go to the store and buy it. The Web becomes part of the overall buying processes."

With Gartner projecting $60 billion in online sales by the end of 2004, Sarner expects brick and mortar chains to take the Web more seriously next year.

"At the height of the dot-com era, there was a lot of investment in e-commerce, but not a lot of people online," he said. "Now there are a lot of people online, but the investment was slashed after the bubble burst. After this year, retailers will see e-commerce as a growth strategy once again."


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