November 27, 2007, 12:00 AM

Online holiday sales: “So far, so good”

Early indications are that online retail sales were strong through the Thanksgiving weekend and on Monday. But with merchants pushing sales offers earlier than usual, analysts say it’s too soon to predict a happy holiday season for e-retailers.

It’s way too soon to pop the champagne corks, but early indications are that the online holiday shopping season is off to a strong start. Analysts note, however, that retailers, online and off, pushed promotions aggressively over the past few days, raising questions whether the strong sales can be sustained.

The first Monday after Thanksgiving has become the unofficial start of the online holiday shopping season, and several e-retailers report very strong results. “Sales rocked,” says Jeffrey Wolfe, chief operating officer and CFO at Moosejaw Mountaineering, No. 297 in the Internet Retailer Top 500 Guide. He says online sales were up 70% over last year, making it the biggest sales day ever for the e-commerce site of the outdoor gear retailer.

Moosejaw credits some of the increase to an e-mail marketing campaign. “We e-mailed very personalized, highly targeted promotions based on buying and browsing history,” Wolfe says, “and it definitely paid off in terms of repeat customer business and increased conversion rates.”

Aggressive marketing also helped boost sales at Ice.com by 82% over last year. That included getting affiliates fired up about the day, with the result that 7,000 affiliates downloaded Ice.com’s banner for the day’s deals. Additionally, much of Ice.com’s marketing on portals MSN and AOL in recent days were focused on Monday, with advertised offers including free earrings to every 100th customer shopping the site that day, as well as 20% off. “There was a lot of focus on that day – and it worked,” says executive vice president of marketing Pinny Gniwisch.

Sales at eBags.com, No. 92 in the Internet Retailer Top 500 Guide, were up 70.3% yesterday over the same Monday last year, making it the second biggest day in the history of the online handbag merchant. That followed a 34% increase year-over-year in Thanksgiving weekend sales.

At jewelry site Goldspeed.com, No. 362 in the Internet Retailer Top 500 Guide, 50% year-over-year gains Saturday and Sunday were followed by a 70% increase on Monday. Goldspeed had been aiming for a 100% increase on Monday, but the site’s performance was slowed by problems on the Yahoo Stores platform, which hosts Goldspeed, says Neil Kugelman, CEO of the online-only retailer. Kugelman implemented a contingency plan that included adding a banner to the home page advising customers having problems with their shopping cart to use the live chat function or to call a toll-free number, and he called in extra call center workers who had been hired for the holiday season but not scheduled to work yesterday.

Even without special discounts or free shipping offers, yesterday was a banner day for firstStreet, which sells on the web at firstStreetOnline.com, No. 384 in the Internet Retailer Top 500 Guide. “We had the best single day for sales on the Internet ever-along with the highest number of visitors, page views and add-to-cart,” says Daniel Yonts, director of Internet marketing and technology. “We expect to increase online holiday season sales by 20% over last year.”

At BabyAge.com, No. 280 in the Internet Retailer Top 500 Guide, sales on Monday were up 231% over the same Monday a year ago. “We made a concerted effort this year to develop specials for Black Friday and Cyber Monday,” says president Jack Kiefer. BayAge.com sales were also up 222% over the average Monday in the previous two months. Friday through Monday, sales were up by 226% over the average Friday through Monday in the previous 2 months. “The entire extended weekend was very strong,” Kiefer says.

E-commerce analysts cautioned against reading too much into the early results. “So far, so good,” says Sucharita Mulpuru of Forrester Research. “It sounded like yesterday was a really, really strong day. But part of the reason the numbers were as strong as they were was the aggressive discounting. The strength of the season will depend on whether the momentum is maintained regardless of discounting in the coming weeks.”

The first Monday after Thanksgiving, which some call Cyber Monday because online sales have spiked that day the last few years, may have become the most heavily promotional day of the holiday season, notes Patti Freeman Evans of JupiterResearch. She points to more than 500 retailers posting special deals on the CyberMonday.com site hosted by online retailer organization Shop.org, a unit of the National Retail Federation, compared with a few hundred last year. Traffic to that site Monday was five times higher than last year, 1.5 million unique visitors vs. 300,000, Shop.org reported, an indication consumers are starting to look for online offers on that day.

The promotions no doubt did boost online sales Monday, but it’s significant that consumers responded enthusiastically to the offers, says Scott Silverman, executive director of Shop.org. He predicts that online holiday sales will be strong this year, in part because the weakening economic news will drive consumers to the web seeking bargains.

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