The 1997 holiday shopping season boomed for online merchants, many of whose sites reported sales two or three times those of the '96 season.
As a key indication of how well electronic commerce is doing, the Gap's online Web site, which opened in time for the 1997 holiday season, was so successful it is poised to become one of the chain's biggest stores in terms of sales volume.
Currently, the Gap's largest store in terms of volume is its 34th Street store in New York, but the infant online operation could soon overtake that outlet in terms of sales, a retail executive familiar with the situation said.
A Gap spokeswoman said the company will not disclose sales volume for individual stores or the online operation. But an analyst put sales at the Gap's New York store at $50 million annually.
Overall, Forrester Research estimated 1997 online spending will reach $2.4 billion.
While most retailers would not disclose numbers, America Online said its merchants are expected to generate $150 million in sales for the month of December.
"A large part of that shopping is still impulse and convenience," said Wendy Brown, VP-electronic commerce at America Online, noting that 40% of sales on AOL took place between the hours of 10 p.m. and 10 a.m.
For AOL shoppers, apparel was the No. 1 product purchased during the holidays, followed by food, books and flowers. By comparison, in '96, the No. 1 category of items purchased was computing products, followed by food, gifts/gadgets and flowers.
A NATURAL TRANSITION
Bob Pittman, president-CEO of AOL Networks, said he doesn't find the sales results surprising. Going into the holiday season, 60% of AOL members said they had window-shopped online and that buying online was the next natural step. "The results have proven out that theory," Mr. Pittman said.
People were less timid about shopping online this year, something Ms. Brown credits with measures such as AOL's guarantee on purchases and the growth of brand names sold online.
Another reflection of that confidence was that consumers bought big ticket items this year. CUC International, which has an area on AOL as well a Web site called netMarket, reported its AOL sales in December were up 47% over '96. It sold items ranging from $3,500 treadmills to cutting boards, said Paul Stanco, director of interactive merchandising at CUC.
Push media company PointCast found similar results in a survey conducted on its site among 5,760 PointCast users. Of the respondents, 48% said they bought something online during the holiday season. Of those who said they shopped, 28% said they spent more than $250 on the items and shipping.
Marketers also leveraged more online discounts and promotional efforts. For instance, America Online's "Holiday Ticker" had discounts. N2K's Music Boulevard offered $1 shipping for an unlimited number of CDs, anywhere in the U.S. Its sales rose eight or nine times over last year, according to a N2K spokeswoman. Eddie Bauer's site promoted its "Holiday Headquarters" gift suggestions area with its first online ad campaign. It also had 98% of merchandise offerings available on the Web, according to Judy Neuman, divisional VP-interactive media, Eddie Bauer, who notes that its online sales tripled from the `96 holiday season.
"Last year people were buying the one item for $30," Ms. Neuman said. "This year they were buying $150 gifts--people seemed to be doing holiday shopping, not just poking around."
Contributing: Alice Z. Cuneo.
Copyright January 1998, Crain Communications Inc.