The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
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“Compared to last year, we don’t see a big difference in how web sites are performing, how products are priced, or in any of the many factors that affect customer satisfaction with online shopping,” says Larry Freed, president and CEO. “So what’s to blame for the large decrease in satisfaction from 2005? It’s got to be the rising expectations of online shoppers.”
However, shoppers who completed online purchases that week gave a customer satisfaction score of 84.8, 2% higher than the previous week. “The good news this holiday season is consumers that are completing their purchases online are having very good experiences,” Freed says.
In spite of the slight slip in satisfaction, retailers were expecting to be able to deliver on customer expectations with regard to shipping, and many were pushing online shopping almost to the limit when it came to deadlines. 39% of 76 polled online retailers reported they would guarantee that standard shipping orders placed by Dec. 18 or 19 would be delivered by Christmas Day, according to a poll of e-retailers by BizRate Research, conducted for the trade group Shop.org. That proportion is double the 19% who last year promised delivery by Christmas for orders placed on those dates.
32% of retailers’ standard shipping deadlines were Dec. 15, 16, or 17 and 23% were Dec. 14. Only 6% pushed deadlines hard and promised standard delivery for orders placed Dec. 20 or later. BizRate pointed out that the cut-off dates were even more aggressive than they appeared because with Christmas on a Monday there was one less business day for delivery than there was last year.
But if retailers promised, consumers believed-and acted. “The growth rate of online retail spending accelerated during the latter part of Dec. 11, with sales on Friday, Dec. 15, growing 38% vs. the corresponding day last year,” says Gian Fulgoni, chairman of comScore. “This demonstrates consumers’ willingness to rely on retailers’ late-season shipping guarantees.”
Slipping satisfaction or not, consumers clearly love online shopping, as sales growth at retailers across the spectrum showed. As mid-December approached, 25% of e-retailers reported sales up 50% over last year while half reported sales up 25% or more, according to BizRate. Moreover, compared with the previous year, 68% said average order value increased and 85% said site traffic was up.
Sales at Batteries.com outstripped the market. “November sales were up 43% and December is on track to do that, too,” Dale Petruzzi said as the end of online holiday sales approached.
Ritz Interactive, which operates camera, fishing and other niche product sites, reported early holiday sales were up more than 40% over the previous year, due largely to strong demand for digital cameras and customer response to a promotion in Google Checkout that offered $20 off purchases of $50 or more.
Sales at MusicNotes.com, a retailer of downloadable sheet music, rose 44% year-over-year during the two weeks following Thanksgiving, as it averaged nearly 3,400 downloads per day and added more than 12,000 customers.
Online sales at K&L; Wines, which sells on the web at KLWines.com, rose 37% year-over-year during the first week of December, after November sales rose 19.2%. For the full year K&L; is projecting a 35% year-over-year increase in online sales compared with 22% for overall sales, vice president Brian Zucker says.
Sales at LetsTalk.com, a retailer of mobile phones and related products and services, increased 145% year-over-year on Thanksgiving Day, then rose 137% year-over-year on the following Monday.
At Moosejaw Mountaineering, holiday web sales were up 70% compared with last year and business was getting busier. Major reasons for the growth were the launch of two new e-commerce sites, snowboarding site theJaw.com and sale items site TheLowdown.com, and the shipping over Thanksgiving weekend of the multi-channel retailer’s 64-page holiday catalog. “The new sites have been huge sources of growth for us, and the catalog has driven a ton of sales online,” says Jeffrey Wolfe, COO and CFO.
And at Shopping.com, a major online comparison shopping site, traffic to merchant partners’ sites rose 40% on the Monday after Thanksgiving.
All in all it was another booming holiday season online, with relatively few glitches that would result in unhappy children on Christmas morn. l