U.S. Gives Holiday E-tailers Passing Grade

The U.S. Federal Trade Commission (FTC) announced Tuesday that the 2000 holiday shopping season “seems to have gone more smoothly for consumers” than it did in 1999.

“Consumers reported fewer problems with online goods being delivered late than in the 1999 online shopping season,” FTC Bureau of Consumer Protection director Jodie Bernstein said.

Even more good news for e-tailers was Bernstein’s comment that “no investigations tied solely to the 2000 holiday season appear warranted.”

Bernstein said that as of January last year, the FTC had already begun investigating more than a dozen e-tailers.

Promises Broken

Last year’s investigations resulted in the FTC levying fines totaling US$1.5 million against seven e-tailers, including Macys.com, Toysrus.com and CDnow.com. According to the FTC, the e-tailers had promised delivery dates when fulfillment was not possible and failed to notify customers when shipments would be late, in violation of federal law.

The FTC’s pronouncement of a more satisfying holiday shopping season came after commission staffers reviewed complaints filed at the FTC, the Better Business Bureau, and online “gripe” sites.

Lowered Expectations

Part of the reason that the e-tailers were better able to meet their shipment commitments this holiday season was that they toned down their promises, according to the FTC.

The agency also credited action taken by e-tailers to strengthen back-office functions, such as supplier relations and inventory systems, which enabled the merchants to make shipments in a “timely manner during peak demand periods.”

In step with the FTC findings, a survey released last week by PricewaterhouseCoopers found that 79 percent of this year’s holiday shoppers reported being completely satisfied with the online shopping experience.

On the other hand, a recent study by Accenture (formerly Andersen Consulting) found that 67 percent of orders placed during the recent holiday season were not received as ordered and that 12 percent had not been received in time for Christmas.

All’s Well

By all accounts, the 2000 holiday season was satisfying for e-tailers and shoppers alike. Several recently released reports have pegged the amount spent online during the holidays at over $10 billion.

Jupiter Research said that U.S. consumers spent $10.8 billion online during November and December, a 54 percent spike from last year’s levels and a 126 percent leap from the 1998 season.

Other estimates come from the NPD Group, which said online sales for November and December totaled $12.2 billion, and from eMarketer, which reported that online sales for the final three months of 2000 generated $12.5 billion.

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