The curtain is coming down on the last holiday shopping season of the true millennium, and early reports indicate it wasn't one to write home about. It was an especially critical season for e-commerce, a late-millennium addition to the buying-and-selling scene. We'll have to wait to read the official fourth-quarter and year-end results. Until then, we'll have to make do with reading traffic signs.
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Traffic to online retail sites slowed during the week before Christmas compared to the seasonal peak reached earlier in December, Internet measurement and research firm Jupiter Media Metrix (Nasdaq: JMXI) reported this week. That makes for happy shoppers, which makes for happy, growing businesses. Were these happy holidays for investors in online merchants? Answers to that should start rolling in early next millennium.
The 31.8 million unique visitors during the week ending Dec. 24 represented a 10.9% decline from the 35.6 million recorded during the week ending Dec. 3 (week two of the holiday shopping season), as measured by the Media Metrix Online Shopping Index. Traffic to retail sites declined each day of the week before Christmas compared to the previous week. Total traffic for the week nevertheless increased 28.4% over the same week last year, reflecting the overall growth in Internet use and online shopping in particular.
Last year's traffic also saw a decline as Christmas approached. This year's peak came one week earlier than last year's, however, when online retail traffic hit its high during week three, Media Metrix said. That early peak might reflect online holiday shoppers who are a little smarter this year, allowing for more delivery time after being disappointed by late arrivals last year.
Whatever the reason, Media Metrix says sites offering easy, last-minute gift alternatives saw some of the largest week-over-week traffic growth, including e-currency site Flooz.com (86.1%), Americangreetings.com (83.0%), Egreetings.com (52.9%), and Hallmark.com (5.5%).
Americangreetings.com also saw the greatest year-over-year growth in pre-Christmas week traffic among all retail sites, up 111.6%. This placed it ahead of Dell.com (Nasdaq: DELL), up 109.4% in traffic, MyPoints.com (Nasdaq: MYPT), up 61.6%, and Amazon.com (Nasdaq: AMZN), up 53.3%. Growth rates aside, Amazon.com and Mypoints.com remained the top two retail sites, with 1.3 million and 1.2 million average daily unique visitors, respectively.
The Media Metrix Online Shopping Index measures visitors from both home and work to nearly 400 online shops. Out of 18 subcategories, book sites and computer sites were the most popular, with 2.0 million and 1.9 million average daily unique visitors, respectively. Flowers/gifts/greetings sites came in at number three, with 1.8 million average daily unique visitors.
Unique visitors, common dollars and cents
How do unique visitors translate into common dollars? A partial glimpse into that was offered this week by BizRate.com, based on consumer activity at its comparison-shopping mall, which Media Metrix ranked as the seventh most-visited retail site for the week ended Dec. 24.
Online shoppers spent over $6 billion this holiday season, and placed over 52 million orders between Nov. 20 and Dec. 26, according to BizRate.com. That weighed-down Santa's sleigh an additional 60% compared to last year, when 38 million online orders rang up $3.75 billion in sales over a comparable period. But while Media Metrix saw unique visitors peak early this holiday season, BizRate saw sales top out five days later this year, reaching $254 million on Monday, Dec. 18. That late-season shopping might have meant a narrow delivery window, but BizRate says otherwise.
After last-year's well-publicized disappointments, says BizRate CEO Chuck Davis, "E-tailers sat up, listened, and met expectations." Online shopkeepers "were able to deliver on their promises, including on-time shipment and customer support. As a result, many businesses were rewarded with repeat customers as satisfied shoppers returned later in the season for additional gift purchases."
BizRate says 88% of online orders were delivered on-time for the period of Nov. 20 through Dec. 15, compared to only 74% last season. A BizRate survey of shoppers found that on-time delivery saw the largest improvement in customer satisfaction ratings, coming in just ahead of customer support. "Consumers are telling BizRate.com that e-tailers are doing a much better job this year in providing quality service," Davis said.
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