Call it the holiday of the Web.

Holiday 2006 proved to be a banner season for the Internet. All the buying and selling contributed to a 26 percent increase in online spending over 2005 to $26.1 billion for the first 50 days of the season, according to comScore, which tracks Internet sales.

“Online continues to grow at some alarming rates,” said Marshal Cohen, NPD Group’s chief industry analyst. “The reason I say alarming is because it’s good and it’s bad. Online sales are terrific to reach the consumer who doesn’t want to go to the store, but online keeps consumers on the whole out of stores and that’s a big problem. It’s what took Christmas out of this year’s Christmas.”

E-tailers, such as Overstock.com, saw traffic to their sites build up until the ground shipping cutoff date, which was Dec. 17, when it started to decrease. “There was a lull on Christmas Day and New Year’s Day and then it jumped back up,” said Jacob Hawkins, senior vice president of online marketing at Overstock.com. “People start returning things. We see a spike in the number of returns starting on Dec. 26 and it picks up into January, then peaks in the first and second week of January. This year, the preliminary data show that returns are running lower than last year. The biggest driver is that we’ve really worked on cleaning up our inventory” and giving better product information so consumers can make informed decisions.

Bluefly.com chief executive Melissa Payner said traffic to the site and sales remained consistent between Christmas and New Year’s Day. “People are still buying dresses and shoes were strong,” she said. “We’re also selling tons of tops, T-shirts, denim and women’s sunglasses — everybody is buying sunglasses.”

Although Bluefly.com officially launches spring merchandise at the beginning of March, Payner said consumers are responding to early spring. “Our swimwear business is great,” she said. “People want something fresh.” Asked about returns, she said: “It’s too early for returns. Our return policy is 90 days. It’s probably going to be a month before we start seeing returns.”

EBay sees activity rise after the holiday, said Jim Griffith, dean of education. “Consumers are either cashing in gift cards they received or sending items they don’t want back to the marketplace. Historically, for the last decade we’ve noticed a jump in activity in buying and listing right after Christmas with momentum building into January, which is one of our biggest months.”

This story first appeared in the January 3, 2007 issue of WWD. Subscribe Today.

Griffith said consumers are more willing to sell unwanted gifts. An eBay poll found that 57 percent of respondents said they receive gifts they don’t like and 69 percent of respondents felt no guilt about regifting. “It’s becoming more acceptable as it becomes more accessible,” he said. “There’s a noticeable jump in the popular categories with the top regifted items being knickknacks, DVDs, CDs, books and bath items. Clothing and accessories are historically areas where there’s been a lot of returns and on eBay there’s a lot of regifting.” Jewelry and consumer electronics, however, are not regifted much. “With jewelry it has a lot to do with value and you can always find a use for electronics.”

Spring goods are starting to appear on eBay. “As eBay matures, it more resembles traditional retail,” Griffith said. “Sellers seem to release more inventory or list more items on their sites.”

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