One Year Ago: Online Holiday Sales Beat Expectations

Originally published on December 20, 1999 and brought to you today as a time capsule.

A just-released study from International Data Corporation (IDC) shows that online retailers are meeting or exceeding holiday sales and service expectations.

According to the IDC research, 83 percent of e-tailers reported that revenues are up over last year. 26 percent saw sales more than double, while another 23 percent experienced 61 to 100 percent growth.

The direct recipients of increased holiday sales are ranked in a NextCard study released today that lists the top ten retailers by transaction volume. Toys “R” Us turned in a surprise performance by surging 19 places to number seven on the list. Amazon holds the top spot, while Barnesandnoble.com fell one position to third, making way for Buy.com.

Toy Story ’99

Toys “R” Us has become this season’s “little-engine-that-could.” As recently as last month, industry watchers considered the brick-and-mortar chain down for the count after a year of missteps in its Web strategy.

Now, both NextCard and Greenfield Online show Toys “R” Us just behind eToys in traffic and sales among toy sites. eToys holds the number four spot, just three spaces above seventh-place Toys “R” Us.

Like many e-tailers, eToys edged out its brick-and-mortar competitor on converting visitors to buyers, and on total purchase price. The average sale at eToys during the first two weeks of December was $65 (US$), versus $45 for Toys “R” Us.

Customer Service

The IDC report also shows a strong improvement in customer service over last year. Although Internet purchasing continues to be dogged by service problems, the percentage of frustrated buyers has greatly decreased over the past year.

During the first two weeks of December, 25 percent of Internet purchases were abandoned mid-transaction, representing a significant improvement over the 65 percent rate from last year.

Abandoned purchases have become controversial in the Internet industry. When consumers use the Web for comparison shopping, they often move deep into the transaction process in order to ascertain the exact price, including shipping and taxes.

Less Fear

Meanwhile, Greenfield Online research released today also shows that credit card fear is down among e-buyers. Last year, 43 percent of shoppers expressed concern about credit card safety, but the number has dropped to 35 percent this holiday season.

Like the IDC study, the Greenfield Online study showed improvements in e-buyers’ confidence in customer service at merchant sites.

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