E-Commerce Gets Better-Than-Expected Holiday Boost

After Tepid Year, Online Retailers Feel Optimistic About 2010

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NEW YORK (AdAge.com) -- Online retailers are back in the game, with holiday sales coming in just short of 2007 levels. Given gloomy forecasts for the sector, positive growth in the most important two months of the year provided a much-needed boost following a tepid year.

ComScore today reported that e-commerce sales for the November and December period rose 4% to $29.1 billion, compared with $28 billion a year ago and $29.2 billion in 2007. Through October, sales were down 1% compared with 2008; sales for the holiday season in 2008 declined 3%, after adjusting for the fact the 2008 season had fewer shopping days than the 2007 season.

Top Ten Online Shopping Days
Date Spending
(in millions)
1 Tuesday, Dec. 15 $913
2 Monday, Nov. 30 $887
3 Tuesday, Dec. 1 $886
4 Wednesday, Dec. 16 $874
5 Monday, Dec. 14 $854
6 Thursday, Dec. 10 $852
7 Tuesday, Dec. 8 $828
8 Thursday, Dec. 17 $809
9 Thursday, Dec. 3 $809
10 Wednesday, Dec. 2 $797
Source: ComScore

Positive harbinger
"It's possible that this better-than-expected end-of-year performance is a harbinger of renewed vigor and optimism for 2010 as the consumer economy seeks to rebound from one of the worst years in memory," said Gian Fulgoni, ComScore chairman. "At the same time, we need to remember that consumers' spending power remains constrained by high unemployment levels, substantial debt and a newfound desire to save."

ComScore had forecast an e-commerce sales increase of 3%. Similarly, some early results have indicated that overall holiday sales may have been better than expected, beating some of the gloomier forecasts for flat to declining sales, compared to a year ago. Even the National Retail Federation, historically optimistic in its forecast had predicted a 1% decline in holiday sales this year. MasterCard Advisors has estimated that retail sales increased 3.6% between Nov. 1 and Dec. 24.

MasterCard Advisors also estimated online sales increased 15.5% between Nov. 1 and Dec. 24 and 17.7% in December. An executive from MasterCard was not immediately available for comment as to why the firm's numbers were significantly higher than ComScore figures. The group aggregates sales activity in the MasterCard payments network and combines it with survey-based estimates for other payment forms to arrive at its estimates.

Online advantages
The online world had several advantages this season. Major winter storms across the East Coast on the Saturday before Christmas and the Midwest during Christmas week encouraged some shoppers to turn to online outlets. In advance of the storm, analysts predicted that those retailers with a "best in class" online presence would be the winners. Bargain hunters are also increasingly turning to online outlets, which, in many cases, offer additional coupons and in-store pickup options.

With a promising holiday season on the record, retailers are optimistic about the category in 2010. Based on a survey of 50 online retailers, Credit Suisse estimates that e-commerce will grow 10% in 2010 compared to 1% in 2009. Electronics and computers will drive that growth, the company said.

Electronics and computers were stand out performers this holiday season, growing 15% compared with a year ago, according to ComScore. Only jewelry and watches, which saw a steep decline last holiday season, showed stronger growth, with sales increasing 20% this year.

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