Online holiday sales seen higher this year

Online holiday sales are expected to increase markedly this year, according to two research firms.

New York-based Nielsen/Net Ratings said online shoppers in the U.S. will spend an estimated US$9.9 billion this holiday season, up 43 per cent from the US$6.9 billion they spent last year.

San Jose-based GartnerG2, a research unit of Gartner Inc., predicts that online holiday shopping sales in North America should reach US$11.9 billion, up 30 per cent from the US$9 billion spent last year. According to GartnerG2, worldwide sales are projected to reach US$25 billion, up 39 per cent from the US$18 billion spent last year.

Nielsen/NetRatings also predicted that the number of U.S. shoppers will grow by 27 per cent, which means 21 million more Americans shopping online this year.

“This signals a solid outlook for e-tailers, who will benefit from an even larger group of shoppers during the upcoming holiday season,” said Sean Kaldor, vice-president of NetRatings analytical services.

GartnerG2 said consumers are buying more online because Web sites this year have increased their functionality and ease of use.

Two online retailers hoping to cash in on the upcoming holiday shopping season are eToys Inc., which was relaunched two weeks ago by KB Toys Inc., and beauty site, which will be formally relaunched tomorrow by The Estee Lauder Cos. and Chanel Inc., both in New York, and Paris-based Clarins Group.

Earlier this year, KB Toys, in Pittsfield, Mass., purchased some of the inventory of the bankrupt eToys and intellectual property assets including trade name, logos, URLs and trademarks. It relaunched the eToys site two weeks ago with little fanfare.

“We did some marketing online, but we’re not doing a major announcement,” said Scott Wilder, vice-president of product development at the Denver-based online division He said e-mails announcing the relaunch were sent to eToys customers by the representatives of the former eToys company. While not releasing specific numbers, KB Toys said traffic to the site since the relaunch has been “good.”

According to Wilder, the Web site relies on eToys software purchased at the bankruptcy auction and on KB Toys’ existing IT infrastructure. Wilder said the eToys site will offer some of the same mass-produced toys as, as well as more specialized learning toys.

Wilder said the two sites won’t be competitors because each has its own customer base. He said customers who purchase items from can return them at any KB Toys retail store.

As for Gloss. com, Estee Lauder, Clarins and Chanel originally planned to relaunch the beleaguered online beauty site, purchased by Estee Lauder in April 2000, in the first quarter of this year. Dennis McEniry, vice-president of technology at Estee Lauder, said the relaunch was delayed because the companies wanted to make sure the Web site offered customers the correct consumer experience.

“This site is all about brand, and because it is a brand-oriented site, we had to work with our partners to ensure that we had the right brand experience,” he said. In addition, McEniry said, the companies had to decide where to go in terms of the site’s strategic platform.

“The former was run on a Blue Martini platform; the new site uses ATG Dynamo,” he said.

Offering more than 5,000 beauty products from Bobbi Brown, Chanel, Clarins, Clinique, Estee Lauder and others, the new site also features beauty tips and the latest news from the beauty world.

Although neither site was successful in the past, Rob Leathern, an analyst at New York-based Jupiter Media Metrix Inc., said companies have learned from the early mistakes. Leathern said a lot of early failures in e-commerce occurred because companies spent too much money on marketing while trying to build an infrastructure and fulfil Internet orders. “It’s hard to be profitable while you’re burning the candle at both ends,” he said.