Online Stores Use Discounts To Boost Sales

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The New York Sun

Computer-savvy consumers did plenty of online shopping over the Thanksgiving weekend, giving companies like Amazon.com and Walmart.com the same kickoff to the holiday season as department stores and malls had.


The pickup in business on the Web was the result of online merchants using marketing tricks like their brick-and-mortar counterparts – plying consumers with special discounts to get them to shop early.


Online sales excluding travel shot up 100% to $133 million on Thanksgiving Day compared to the same day last year, said comScore Networks Inc., an Internet research company. On Friday, online sales hit $250 million, up 41% from a year ago.


“We certainly expected a strong performance during the holiday weekend, but these are impressive figures,” said Dan Hess, senior vice president at comScore.


Historically, the online shopping season has begun the Monday after Thanksgiving, when consumers begin buying from their workplace computers. But the early start this year can be attributed to two phenomena: Merchants are working harder to get online sales, and millions of homes have installed highspeed Internet connections, making it easier to shop from home.


About 53% of those consumers who have access to the Internet currently have high-speed Internet connections, compared with 40.9% a year ago, according to Ken Cassar, an analyst at Nielsen/NetRatings Inc.


According to Nielsen/NetRatings, the sites that had the biggest spikes in visits this last Friday, compared with a week earlier, were those operated by traditional retailers, including Walmart.com,Sears.com, and Toysrus.com. Toysrus.com’s traffic soared 212.6% on Friday, while Amazon.com was up 49.7%, Nielsen/NetRatings said.


“Consumers are becoming more savvy about how to use the Internet,” Mr. Cassar said. “They realize they can do things that can make their stores shopping trip more efficient.”


Melissa Payner, president and chief executive ofBluefly.com, an online seller of discounted designer fashions and accessories, reported a double-digit increase in sales during the Wednesday through Sunday period from a year earlier. In 2003, the company drove sales and traffic with a promotion on Prada handbags and wallets on Thanksgiving Day but decided to be even more aggressive this year, offering a larger assortment of Prada merchandise.


Bluefly.com also launched its own sweepstakes that gives customers chances to win a closet full of ultra-upscale Jimmy Choo shoes by going to its Web site through January 15.


“For the first time, we really participated in the Thanksgiving weekend,” Ms. Payner said. “Prior to that, there was a belief that customers just went to the stores.”


A spokeswoman at Wal-Mart Stores Inc., Amy Colella, said the discounter was pleased with sales for the Thanksgiving weekend. She noted that Thanksgiving Day was the busiest day online so far this season, with sales doubling from a year ago.


Wal-Mart, which saw online business surge on Thanksgiving Day a year ago, kicked off Internet holiday shopping earlier this year with discounts on such items as diamond bracelets and cappuccino makers.


Still, online sales growth is not expected to be as strong as the prior year, given the maturing of the Web. Forrester Research projects that online holiday sales, which includes travel, will rise by 20% to $13.2 billion. That compares to a 31% growth in 2003 over the previous year.


Comscore estimates that online holiday retail sales, excluding travel, will rise between 23% and 26%, to between $15.1 billion and $15.5 billion. That compares with a 30% increase over the 2002 holiday season figures.


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