WSJ: 5% jump in online sales for holiday season

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The original article is behind the pay wall. You can access the Comscore press release mentioned in the article here.

Below are my findings from the two articles –

Online sales for the 2009 holiday season (November 1 – December 24) was $27 billion. This is a 5% increase compared to the same period for 2008.

However, we had a additional shopping day this year since Thanksgiving fell on Nov 26 (compared to Nov 27 in 2008). Adjusting for the additional shopping day the increase was only 3.5%.

If you consider year-to-year change, the holiday season online sales had fallen by 3% from 2007 to 2008. So this 5% growth is a positive change for online retailers.

However, there is more to it than just this aggregate number. On the down side, Comscore says that amount spent per buyer was lower in 2009 compared to 2008.

They attribute the 5% jump to the following factors –

  1. Overall increase in the number of people buying online. (Resulting in lower spending per person)
  2. The snowstorms during the Dec 19-20 weekend helped online sales.
  3. Free shipping by retailers helped. (Read more about free shipping here)
  4. Large retailers outperformed small businesses. (See more on this below)
  5. Aggressive marketing by merchants.

The product categories that had strong sales this year were –

  • Consumer electronics – Growth of 20%
  • Jewelry and Watches

Large retailers outperformed small businesses

Dallas Morning News points out that 55% of online sales this year was conducted through the top 100 internet retailers. Big online retailers such as Amazon and Walmart fared better than small business online retailers this year. These big companies are performing better on pricing. They also have higher customer satisfaction ratings because they have the spending power to improve web shopping experience.

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