STUDY SEES BIG HOLIDAY FOR ONLINE RETAIL SALES

NEW YORK — Internet retailers can expect to field twice as many sales transactions this holiday, on average, as they did last November and December, according to new research released Thursday by Jupiter Communica-tions.
The study, conducted by Jupiter’s new Commerce Infrastructures Strategies practice, predicts U.S. consumers will spend roughly $6 billion online this holiday, deluging the busiest sites with an average of 58,000 transactions daily during November and December, up from 29,000, a year ago.
As a result, the Silicon Alley consultancy advised e-tailers to either begin making contingency plans to handle the rapid acceleration it is anticipating, or face even bigger problems completing and fulfilling transactions than they did during holiday 1998.
That season established the Internet as a significant channel for distributing goods, even though e-tailers were unable to keep up with the demand for various reasons, ranging from the failure to offer customer service in real time — if at all — to the absence of an adequate infrastructure to process and fulfill orders.
“Unfortunately, the window has closed for commerce sites to make significant infrastructure adjustments before the holiday volume,” said David Schatsky, analyst with Jupiter’s commerce infrastructure group.
“Commerce sites must now focus on contingency plans, including increasing staffing in distribution, fulfillment and call centers.”
Although many Internet players still think they can handle geometric growth online via clever systems architecture and raw computing power, Schatsky noted, “Internet commerce extends far beyond a web site. Web ventures must stop the launch-and-adjust development cycle. They must focus on the entire delivery chain if they want to avoid being crushed by rising Internet commerce activity, instead of profiting from it.”