Is This What Saved Christmas for Online Retailers?

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Don't call it a comeback. After a mid-holiday-season shopping lull sparked worries about a drop in online spending, Web retailers pulled off a late-December surge to get those revenue figures back on track.

That's good news for retailers' top lines, but profit margins probably took a hit in the process.

According to comScore, last week's five-day online haul was up a massive 53%, led by $1.01 billion in sales booked on Monday, Dec. 17. That marked the 12th billion-dollar sales day of the season. And it helped boost total holiday growth by 16%, better than the 13% rise that the industry was on pace to set just a week before.

A late-season surge like that isn't typical. ChannelAdvisor noted last week that cyber sales had slowed down appreciably after the Black Friday bounce. The e-commerce watcher estimated's (NASDAQ: AMZN  ) early-December same-store sales results as up just 26%, compared to a 41% boost in November. eBay (NASDAQ: EBAY  ) also saw sales growth tick down for the first two weeks of December, up 23% versus the 27% bounce last month. Overall, sales looked to be following the multiyear trend of moving earlier in the calendar, making for a front-loaded shopping season.

But the pullback was reversed last week as retailers offered aggressive free shipping deals and guaranteed delivery by Christmas. Wal-Mart (NYSE: WMT  ) gave online shoppers free shipping on most orders over $45, while Target (NYSE: TGT  ) waived shipping fees for most orders over $50. Costco (NASDAQ: COST  ) guaranteed delivery by Christmas Eve for orders placed as late as 11:59 PST last Thursday night.

And for Amazon's part, the e-tailing giant has been more generous with shipping charges than Santa himself. The company ate about $2.5 billion in shipping costs last year and is on pace to hit $3 billion this year, in what's become a huge drag on profit margins.

Last week's online spending bounce suggests that other retailers are following that pricey example. They kept their sales flowing through what should have been a down week, even if it meant taking a bath on shipping costs.

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