Online sales defy downturn

Online shopping destinations report that, despite the economic gloom, they are still doing brisk holiday business and that, thanks to a variety of new bells and whistles, they are becoming more sophisticated merchants.

“This will be our biggest season ever,” said Chris Cunningham, acting CEO of San Francisco-based RedEnvelope Inc., which sells a variety of gift items ranging from tools to jewelry and home decor.

This holiday season, RedEnvelope is using analytical CRM software from Kana, in Menlo Park, Calif., to gain insight into customer behaviors.

“We use the analytics to obtain a deeper understanding of how customers are seeing our products, and on the basis of that understanding, we make a decision as to where that product is going to be in the store,” Cunningham said.

Meanwhile, industry analysts have supported the e-tailers’ experiences, reporting that most shopping sites have overcome the negative effects of the recession and the Sept. 11 terrorist attacks.

The Jupiter Media Metrix Online Shopping Index, for example, recently reported 50.2 million unique visitors during Thanksgiving week, up from 35.2 million a year ago.

However, one point of conflict seems to stem from a report by San Mateo, Calif.-based Internet performance analysis company Keynote, which said last week that it found e-tailers were taking longer to fill orders thus far this season when compared with the entire holiday shopping season of 2000. Orders on average have required 150 hours for delivery, as opposed to 111 hours last year.

RedEnvelope disagrees, stating it has a warehousing operation co-located with a national sorting center to enable next-day delivery.

But despite the logistics challenges, other e-tailers remain upbeat.

The season has been “fairly solid,” when compared with last year, said David Jackson, assistant administrator at Houston-based Ashford, which sells jewelry and related items online.

“It’s not up, but considering the economy and the recent New York and Washington attacks, it’s fairly consistent,” Jackson said.

Ashford, another Kana customer, has been using Kana Response 6.5 for e-mail management.

“It’s helped us a little bit as far as managing the volume of e-mails,” enabling the company to keep track of content, Jackson said.

Another company to improve its online shopping infrastructure is Eddie Bauer, which added video streaming technology from Vendaria to enable placement of product videos on its site. Brian Walker, group manager of development services at Eddie Bauer in Redmond, Wash., said the videos are 30 seconds to 45 seconds long.

Nashville, Tenn.-based Shop At Home TV used BroadVision’s e-commerce platform to spruce up its online store. It has a redesigned checkout process that allows customers to select an item and complete a purchase with one mouse click.

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