Online Sales Rise Dramatically For 2004 Holiday Season - InformationWeek

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12/29/2004
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Online Sales Rise Dramatically For 2004 Holiday Season

Consumers are becoming more comfortable with making last-minute purchases online, and vendors are getting better at fulfilling late orders.

Online retail sales took off this holiday season as consumers increasingly took to shopping from the comfort of their homes.

Online sales, excluding travel-related sales, for the week ended Dec. 26 were $1.2 billion, according to market-research firm ComScore Networks.

Visa USA said that Visa-branded cards were used to make $1.8 billion in online purchases, including travel-related purchases, for the same week. That's up 58% over the same period last year. The number of online transactions reached 24 million, up 43% from a year ago, according to Visa's SpendTrak report.

For the week ended Dec. 19, Visa's online sales were $2.7 billion (up 39%) and online transactions were 34 million (up 34%). Similar increases were recorded for preceding weeks.

Amazon.com Inc. reported its busiest holiday shopping season ever. For the first time, the company's sales of consumer-electronics products exceeded book sales. During the Nov. 25 to Dec. 24 period, Amazon even set a single-day record of more than 2.8 million items ordered, although it didn't disclose which day that occurred.

The season saw a surge in the use of plastic for both in-store and online purchases. MasterCard International processed $60 billion in sales and 914 million transactions over its Banknet authorization network for the period between Thanksgiving and Christmas, an increase of 13% and 18%, respectively, over last year. The peak-shopping day for MasterCard occurred Dec. 23, when it processed 37 million transactions.

The data indicates a shift toward more last-minute shopping online. In 2002 and 2003, the peak period for online sales occurred two weeks after Thanksgiving and then dropped off sharply, according to ComScore. In 2004, Visa's peak online sales also took place two weeks after Thanksgiving, but there was no drop-off afterward; sales stayed at or near the peak level right up until Christmas.

The trend toward more last-minute shopping online reflects the use of better forecasting techniques by retailers, says David Schatsky, senior VP at JupiterResearch, a market-research firm. Retailers, he says, are becoming more sophisticated in tracking online sales for the purpose of determining how much inventory to keep on hand. That, in turn, is enabling them to ship later in the season and offer consumers later cutoff dates for making online purchases.

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