A bumper Christmas for e-tailers

Initial reports suggest that e-tailers had a good Christmas:

- estimates suggest that sales were four times the value of 1999
- clicks and bricks did better than the surviving pure players
- sales peaked in the 3rd week of December. This is mainly due to the retailers cautious cut-off delivery dates. Next year there is a huge opportunity to extend delivery and increase sales…

Last Christmas was a great disappointment to many e-tailers. It had promised to finally prove that the future lay with new channels for shopping since Christmas is generally disliked and the web would offer a civilised alternative to the high-street crush. This led to staggering forecasts of £1bn sales for Christmas 1999.

The reality was £98m sales (Verdict). On top of this the media was full of horror stories of lack of delivery, with an Anderson report showing that only 75% of orders were delivered on time.

This has provoked the retail industry to take a cautious approach to Christmas 2000. All the major data centres such as Jupiter and NOP have refused to give forecasts having been burnt badly from last year.

However 2000 has been a year of growth for most bricks and clicks retailers (coinciding with the downfall of many pure-players). A recent survey by Verdict estimates the online shopping market is now worth £1.35bn, an increase of 130% on 1999

Firstly there are more surfers (11m households versus 7m last Christmas). Research from NetValue found that this Christmas Internet users were at least three times more active than last Christmas, and that women users were four times more active this time around.

Most retailers offered cautious promises of delivery with last orders being taken in the 2/3rd week. This meant that Christmas sales peaked in the 3rd suggesting that there is much opportunity next year to increase spending in the last week if delivery could be guaranteed.

Whilst official trading figures will not out to later this month, early figures suggests the cautious approach has paid off:

- Shoppers are thought to have spent £400m this December on purchases in cyberspace. David Smith, of the British Retail Consortium, said that Internet shopping "wasn't even on the map" last year but the group estimated that this time, it made up 1 per cent of the £40bn spent in the annual shopping rush in December

- Amazon.co.uk in it’s trading period between Nov 2 and Dec 19, it sold 3m items (compared to 31 m items in the US) but double on its 1.5m items last year. It claims that 99% of the orders were completed in time for Christmas.

- Tesco reported up to 60k on-line orders a week prior to Christmas.

- Unexpected demand over the holiday period forced the Woolworth.co.uk site, which began its New Year sales on December 23, to extend its guaranteed delivery time from three days to ten days. A spokeswoman insisted all delivery promises had been met and said Woolworth's first Christmas online proved particularly popular among older customers, or "silver-surfers", who where spending an average of £50-£70 per visit, compared to £10 in the company's high street stores

- Lastminute.com, the travel and gifts site, yesterday said that December sales were more than double that in 1999.

- Etoys.co.uk was the most visited games and toys site, with over 370,000 unique visitors (not that it did them much good as news of the closure of their UK operations shows.)

- Christmas sales figures released by Waitrose.com have revealed an increase of 500% on last year figures. 70% of customers who placed orders this Christmas were new to Waitrose Direct.

However it is the clicks and bricks that are marching ahead with Jupiter Media Metrix finding that 8 out of 10 of the fastest growing retail websites in the first 2 weeks of December were traditional retailers.

- Stateside

According to Goldman Sachs, online holiday spending, beginning the first week of November 2000 and ending December 17, 2000, hit $8.7 billion. This amount represents a 108 percent increase over the same time period in 1999 when $4.2 billion was spent online

Goldman Sachs also reviewed the online shopping categories of the season, the biggest five of are listed below (in thousands). More than one-half, 54 percent, of the apparel category was spent specifically on holiday gifts:

- Apparel: $182,221
- Travel: $169,704
- Computer hardware: $141,053
- Toys/child items: $133,035
- Electronics: $122,367

BizRate.com found somewhat slower growth. The company last week estimated that online shoppers spent more than $6 billion between Nov. 20 and Dec. 26, up 60 percent from $3.75 billion spent online during the same period in 1999

According to Visa International, Visa cardholders spent more than $2.5 billion online between November 24 and December 19, 2000. December 12 was the top day, Visa says, with $129 million in transaction volume. Visa reported that check cardholders spent $598 million online in the same timeframe--a number that increases 133 percent from the same time last year

As with the UK, sales peaked in the 3rd week of December and traffic to online retail sites in the week ending December 24 was down 10.9 percent from the holiday season peak.

E-tailers' sites attracted 31.8 million unique visitors in the last week before Christmas, compared with 35.6 million unique visitors for the week ending December 3, according to figures from Media Metrix.

However although traffic to retail sites was down, e-tailers offering last-minute gift alternatives, such as online greeting cards and online currency, experienced a surge in visitors last week

Yahoo Inc. said holiday order volume through its online shopping site, Yahoo Shopping, nearly doubled over 1999 levels

Kmart Corp.’s Bluelight.com reported that online holiday sales in November and December were 11 times higher than last year, far exceeding expectations