Online holiday spending rises from the doldrums

Computerworld - With a rocky economy and a dismal job outlook, online holiday shopping got off to a slow start this year. Since Dec. 1 though, shoppers appear to have come alive with the holiday spirit, according to data compiled by online researcher ComScore Inc.

Through the first 35 days of the 2008 holiday shopping season -- Nov. 1 to Dec. 5 -- online buyers in the U.S. had spent $14.92 billion -- about the same amount as they spent during the same period last year, ComScore said. But for most of November, sales were lower. It appears that the tide turned at the beginning of December, as online shoppers spent $3.74 billion in the first five days of the month -- 9% more than they did in the first five days of December 2007.

ComScore, which monitors the Web sites of 35 major retail companies, had reported last week that online sales on Dec. 1 -- also known as Cyber Monday because of the number of people shopping online at work after returning from a long Thanksgiving weekend -- hit $846 million in the U.S. And Dec. 2 came in strong, as well, with online buyers spending about $823 million that day.

"The online holiday shopping season has picked up noticeably since Thanksgiving as consumers have given in to the holiday spirit -- and very attractive retailer discounts," said ComScore chairman Gian Fulgoni, in a statement. "While this growth is certainly a positive development in this tough retail season, it also needs to be put into perspective. With the compressed time period between Thanksgiving and Christmas this year -- five days shorter than last year -- we need to see continued strong growth during the critical weeks between today and Christmas if this year's shopping season is to at least match that of last year."

This uptick in spending is good news not just because the economy has been faltering but especially in light of the fact thatmultiple shopping sites experienced glitches that marred the kickoff of post-Thanksgiving online holiday shopping. Analysts said earlier this month that sales probably would have been even stronger had several companies -- including Sears, Bloomingdale's and Saks Fifth Avenue -- not been hit with Web site breakdowns in the days after Thanksgiving.

For example, Keynote Systems Inc., a San Mateo, Calif.-based Web monitoring company, said Sears.com was mostly unavailable on the day after Thanksgiving between 10 a.m. and 12:30 p.m. Eastern time, and again between 1:30 p.m. and 5 p.m.

The problems at the retail sites were probably caused, at least partially, by a common oversight on the part of online retailers: They load-tested just their home pages rather than their full online stores, according to Shawn White, director of Keynote's external operations, in a previous interview.

Late last month, ComScore had predicted that online spending would be flat this season. However, this week the researcher noted that some product categories are doing very well so far this year. Online sales of sports and fitness equipment are up a whopping 35%, while consumer electronics sales are up 24%, which is good news for PC makers and chip makers, who had been starting to suffer.

Just a few weeks ago, iSuppli Corp. slashed its 2009 growth forecast for PC shipments by nearly two-thirds because of the deteriorating economy. And just before releasing that down forecast, iSuppli had also projected that 2008 semiconductor sales would decline by 2% to $266.6 billion, from about $272 billion in 2007.

Read more about internet business in Computerworld's Internet Business Knowledge Center.