The E-Tail Holidays Are Coming, Ready or Not

This holiday season, e-tailers have pledged to be ready for anything. And that’s a good thing, experts say, because the uncertain economy and the lingering effects of the September 11th terrorist attacks on the United States combine to make this one of the most difficult holiday seasons to predict, both in terms of how much will be spent and what consumers will want.

“No one knows what’s going to happen,” Purdue University retail professor Richard Feinberg told the E-Commerce Times. “If anyone claims to know for sure, they’re lying. There is just too much uncertainty out there.”

That uncertainty may play into the hands of e-tailers as they compete with brick-and-mortar stores, Feinberg thinks.

“Stores are taking a cautious approach in terms of what they put on their shelves and in their back rooms right now,” he said. “That could be a benefit to e-tailers, who can often get and ship products faster than a store can order [them].”

Not All Fun

Last year, the gift on top of every holiday list was the Sony PlayStation2. And as it turned out, that was bad news for e-tailers.

A shortage of the game consoles led to the slowdown or even temproary shutdown of some e-tail sites, including BestBuy.com (NYSE: BBY) and Amazon.com (Nasdaq: AMZN), as automated shopping “bots” scoured the Web for the elusive toy, which also fetched top dollar on auction sites.

This year, while only the most eager shoppers have already begun making holiday purchases online, some early trends are being spotted.

On the Trail

Elizabeth DeMuth, a spokesperson for Lycos Shopping (Nasdaq: TRLY), told the E-Commerce Times that based on consumer searches on the network, some items are already beginning to break away from the pack.

“Anything Harry Potter has been moving up the charts, a trend we expect to continue with the release of the movie,” Demuth said. “We are also beginning to see a growing interest in Neopets.”

Feinberg and other experts suggest that children’s gifts this holiday season are likely to be insulated from any negative effects of the September 11th attacks because parents are looking to give their children a sense of normalcy.

However, the attacks may have a more direct impact on what adult toys and accessories will be in vogue.

Plug It In

While Microsoft’s new operating system, Windows XP, is already racking up sales in advance of its scheduled late-October release, interest is also running heavy in virus-protection software and other Internet security products.

“We are seeing an expanded use of customers’ home offices,” Beyond.com spokesperson Luz Rodriguez told the E-Commerce Times.

The company, which provides online sales services to dozens of e-tailers, has seen its sales “skyrocket” in the anti-virus and security software sectors, according to Rodriguez.

“We predict a continued trend of these sales for the holidays,” Rodriguez said.

Time To DVD

Others say one particular electronics product will top the wish list for adults.

“Holiday 2001 will be a DVD holiday,” said Lisa Hagendorf, a spokesperson for Netflix, a service recently launched by BestBuy.com that enables consumers to rent DVD movies online (*correction).

According to Hagendorf, the Consumer Electronics Association expects the number of DVD players in U.S. households to more than double before the end of this year, from 12 million at the start of 2001 to 25 million.

Wave the Flag

Others, meanwhile, think patriotism will be in this year. A spokesperson for A&E.com said that company, which sells merchandise linked to A&E and The History Channel, has already moved to beef up its stock of U.S. flags and related merchandise, as well as its supply of historic videos relating to New York City. Purchases in those product lines are clearly nods to the events of September 11th.

In short, no one is quite sure what will be the hottest selling item or biggest trend this year. And no one is even sure if Americans will allow themselves to get caught up in a consumer frenzy as in past years, when Cabbage Patch dolls and other toys set off shopping chaos.

Less is More?

Purdue’s Feinberg said the largest e-tailers — and brick-and-mortar merchants with strong online channels — stand to gain from the present uncertainties, as long as they remain flexible and do not commit to any trends too early. Portals that get revenue from a host of shopping sites are also in a good position, he believes.

Moreover, the fact that consumers have not been spending recently could actually portend a good holiday season, even if the slow start hurts some e-tailers’ third-quarter results.

“The consumers will definitely have the money to spend,” Feinberg said. “Figuring out how they’re going to spend it is another matter. Right now, there’s a sense that people want to cocoon, to stay at home and be safe with their families, stay out of crowded malls. If that continues, it could be good news for e-tailers.”

*Editor’s Correction Note: In the original version of this article, we reported that Lisa Hagendorf was a spokesperson for BestBuy.com. In fact, Hagendorf is a spokesperson for Netflix, a service launched by BestBuy.com that enables consumers to rent DVD movies online.

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