Unlike traditional retailers that can milk the calendar to the very end, the limitations of fulfillment put an early close to the Internet selling season. With profitability and cash burn concerns in the balance, the abridged holidays won't help the sector's mortality rate.
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It's the end of the eHolidays as we know it -- and e-tail doesn't feel fine.
The hard sell for the 2000 season is on its last fevered pitch. The free-shipping promotion at Amazon.com (Nasdaq: AMZN) and Kmart's (NYSE: KM) bluelight.com ended yesterday. If you want your Buy.com (Nasdaq: BUYX) order guaranteed for Christmas delivery, you better hurry. Unless you're willing to ante up for more than "standard shipping," you have to complete your online checkout by tomorrow. Even if you want to pony up for overnight delivery, eToys (Nasdaq: ETYS) and Amazon need your order by Dec. 20. That is, naturally, if what you want is actually in stock. Can it be? Are the online retailers on the verge of post-holiday depression while the autumn breeze is still swirling about? The fact that Christmas morning falls on a Monday this year has placed a virtual speed bump in terms of weekend delivery service. Amazon will be offering "Holiday Saturday Delivery" and "Holiday Christmas Delivery," but at what price? While bricks-and-mortaring it will cost you the same today as it does on a mad Christmas Eve scramble, the online world ticks differently. We're now at a point where every passing day brings a higher-priced shipping option for holiday gift assurance. With the memory still fresh of Toys "R" Us (NYSE: TOY) stranding a few online Santas last year, even the need for speed may not be enough to kill the perception that it might already be too late for holiday delivery. If it isn't obvious, the online and offline retail worlds march to different beats. The day after Thanksgiving -- "Black Friday" -- is typically the busiest day of the holiday shopping season. But as astute followers of Amazon's Delight-o-Meter live order tally have pointed out on the Fool's Amazon discussion board, that was Amazon's slowest day over the last half of November. Slower days are no doubt ahead in e-tail, even as suburbia braces for a desperate pickup in mall traffic. It's just as well for Amazon. The rampant stories of split shipments during the free-shipping promotion can't be helping margins. And those margins were running skimpy even when the patrons had to pick up the fulfillment tab. Two weeks ago, in Wake Up, Amazon!, I noted how surprised I was to receive shipping confirmations for a pair of $7.99 Magna Doodles just three minutes apart. Different confirmations. Different United Parcel Service (NYSE: UPS) tracking numbers. To give the story closure, the six items I ordered with free shipping arrived in five separate installments. The Delight-o-Meter's spinning wheel should give investors good reason to expect that revenues will once again best analyst expectations. However, reporting a wider-than-expected $0.26 loss per share for the quarter seems quite likely given the huge fulfillment costs that Amazon is forced to swallow during the program's popularity. Pure e-commerce players have plenty to worry about lately given cash burn rates and the financing drought. Some companies, such as MotherNature.com (Nasdaq: MTHR) and Pets.com (Nasdaq: IPET), are winding down operations before the holidays gave them a fighting chance. A few more will no doubt be gone by this time next year. The ghost of Christmas past was filled with festive memories. The ghost of Christmas future ends in a grave. With optimism back-ordered, will the sector regain its winning ways? This year, time is running out for guaranteed Christmas delivery.
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