October 25, 2001, 12:00 AM

Auction sales will soar as holiday shoppers look for value online

With spending forecast at more than $1.3 billion this season, auction sales will edge out even toy site sales this Christmas, says Nielsen/NetRatings.

Analysts identified bargain hunting as a key theme in online retail for Holiday 2001 as early as August. “Consumers are going to be looking for value this year,” says analyst Mary Brett Whitfield of Retail Forward. Retailers from Ashford.com to Wal-Mart have put outlet, clearance and roll-back sections on the front page of their web sites, and this week, online spending forecasts from Nielsen/NetRatings offer more proof that bargains will drive sales online this Christmas.

“As the holidays come, more shoppers will be looking to auctions,” says Lisa Strand, chief analyst at Nielsen. The New York-based research firm says auctions will rank third in online spending in November and December among 13 product categories tracked, with sales projected at $1.4 billion. Trailing apparel, for which online sales are forecast at nearly $2.5 billion; and the combined category of book/music/video, at nearly $1.7 billion, auction sales will edge out sales at dedicated toy sites, typically a top-selling online category at the holidays.

Online toy sales are in the number 4 spot in Nielsen’s forecast with projected sales of $1.1 billion, followed by computer hardware at a projected $1 billion. And what Nielsen calls “value–oriented” web sites are expected to see the third-highest growth in traffic between August and December among all categories tracked-–an increase of 73% over last year. Value-oriented web sites as defined by Nielsen are those that offer consumers special deals, such as Columbia House, which offers discounts on volume purchases of music recordings.

Auctions’ soaring popularity and their key role in Q4 sales is accelerating growth at online liquidators such as eValueville, which handles apparel liquidations for Bloomingdale’s as a branded presence on eBay. President Andrew Waites says his company’s auctions on eBay have grown from zero to an average 1,250 a day over the past 15 months. That means eValueville offers an average 1,250 clearance items from the retailer on eBay at any given time; that inventory turns every three days. Rapid growth recently forced the company to switch to FairMarket for auction management and hosting services when a former vendor could no longer keep up with the increasing volume, Waites says.

And that volume is being driven by the auction traffic from a single retail client; Waites says he’ll shortly be adding others as holiday bargain shoppers boost sales and traffic at the already-popular eBay. “We’re in the right place at the right time,” he says. “Where else can shoppers get a $119 Tahari shirt for $20.50?”

Holiday bargain hunters as well as other Christmas shoppers are already on the web, say some web-based marketers. FindGift.com, for instance, saw a traffic spike in October. FindGift.com allows consumers to search for products, recommends gifts and provides links to retailers. “Our traffic is heating up a lot already,” says Carolyn Zakrzewski, co-founder and vice president of sales. “We expect online shopping will be just as strong this year as last and possibly stronger.”

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