For the first time, online retailing during the holiday season was not a universal success.
Forrester Research Inc.’s survey of 80 retailers shows growth in the low-double digits for the season, whereas comScore’s most recent data has online spending down 1 percent.
Still, there were clear winners in the e-tail world. Amazon.com reported its best holiday season ever in its 14 years in business. “We’re really, really pleased by how the holidays went,” Amazon spokeswoman Tracy Ogden said Sunday. Traffic has been high for the last month, and shoppers ordered more than 6.3 million items, the company said.
With the northern half of the country deep in snow last week, gifts and cold-weather gear proved popular, with shoppers lured by free overnight shipping promotions. Bestsellers included cashmere socks and pajamas, boots and coats, as well as $100 half-carat diamond stud earrings, and a $70 gold diamond cupcake pendant, Amazon said.
Holiday 2008 was also good for Zappos, which sells shoes, accessories and apparel. “We’re still running well ahead of last year and had our first day ever over $6 million in gross merchandise sales on Dec. 15,” said Zappos vice president of merchandising Steve Hill. “Two thousand and eight will be the first year we pass $1 billion dollars in gross merchandise sales.”
The company’s highest-volume days of the year were Dec. 15, 16 and 17.
Off-price retailer Overstock.com is down 15 percent in sales revenue for the quarter but will break even, said chief executive officer Patrick Byrne. Record-high discounts at department stores before Christmas made it difficult to compete. “For the kinds of goods we sell, it’s retail Armageddon,” he said. “We’ve gone into the bunker and are waiting for the radioactive mushroom crowd to drift by.”
He predicted an “unprecedented” wave of store closings in the near future, estimating full-price retailers that slashed prices will shrink 10 percent and those that did not will contract 30 percent. Overstock is “buying very aggressively right now” and predicts store closings will drive more shoppers online. The company did not have layoffs but did not hire as many people as usual for the season. It has about 750 employees.
While predicting low-double-digit growth for the holiday period, Forrester sees high-single- to low-double-digit growth overall for all of 2008, based on a series of surveys of retailers through the Christmas season.
“We just finished a survey with about 80 retailers and about 60 percent said sales were up for holiday season,” said Forrester analyst Sucharita Mulpuru. “Anecdotally, a lot of retailers told us there was a lot of delayed shopping in December.”
The biggest days for online retailing tend to occur in the week before Christmas, especially the three days before the holiday, she said.
Shoppers use the Internet for holiday shopping because there are “a lot of sales and good bargains.…It’s easier to shop online than fight with crowds in a mall. There’s more variety online, and typically a larger assortment of products and opportunity to find extended sizes and colors you wouldn’t necessarily find in the offline world,” she said.
Forrester expects a weak first quarter and performance for the year similar to 2008. However, there could be a pickup in 2010 after the economy recovers, Mulpuru said.
According to comScore’s less optimistic analysis, from Nov. 1 through Dec. 21, consumers spent $24.71 billion online, down 1 percent from the corresponding period last year.
Sales were off before Thanksgiving, but snow just before Christmas in northern regions of the U.S., as well as the compressed holiday period, led to a “burst of activity” close to the end of the year, said comScore chairman Gian Fulgoni.
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