Was the Season Green Enough?

The online holiday shopping season has ended, and it appears sales met analysts expectations by more than doubling over last years numbers. Still, that may not be enough to sustain some struggling Web retailers.

During the eight-week period from the first week of November through Dec. 24, 2000, total online sales reached $9.8 billion, compared with the $4.7 billion consumers spent online during the 1999 period, according to a PC Data and Goldman Sachs Group survey.

Other metrics showed a similar upward curve. Visa USA reported its cardholders spent about $3 billion online from Nov. 24 to Dec. 24, compared with $1.5 billion a year earlier. And Yahoo! said holiday order volumes through its online shopping site, Yahoo Shopping, nearly doubled over 1999 levels.

America Online reported an 84 percent increase in Christmas spending online to $4.6 billion against the same period last year.

“Despite disappointing reports from some Internet online retailers, online spending growth was healthy during the holidays,” said Cameron Meierhoefer, Internet analyst at PC Data.

Amazon.com dominated the online shopping scene. Amazon and business partner Toysrus.com received 123 million visits during the holiday season, dominating the top 15 online retailers, according to Nielsen//NetRatings.

The pair received more than five times as many shoppers as the next closest competitor, eToys.com, which logged more than 21 million visits. Still, traffic doesnt always translate into sales. In December, eToys issued a third-quarter earnings warning. The Los Angeles company also began exploring alternatives, including a possible sale of the company or its assets. Last week, eToys announced it plans to lay off 700 of its 1,100 employees and will close its European operations early in 2001.

Overall, this was the season in which click-and-mortars attracted more customers to their sites than the pure-play Net companies. Nielsen//NetRatings found that 11 of the 15 most-visited online retailers during the holiday season were also offline retailers. These sites included Barnesandnoble.com, Walmart.com, JCPenney.com, BestBuy.com, Kmarts BlueLight.com and Sears.com.

Many online retailers needed a blowout holiday season, said Seth Geiger, vice president of research at comparison-shopping site BizRate.com. Those that did not get it might not survive to see much of 2001.