December 10, 2010, 3:06 PM

The thrill is gone, but not for long

Consumers have slowed their online holiday spending but sales are expected to surge.

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After using promotions to boost sales immediately after Thanksgiving, top e-retailers this week reduced their discount offers. But it appears they are simply resting up for a big selling week starting Monday.

Channel Intelligence says its clients’ online sales from Dec. 1 to Dec. 7 increased 10.6% year over year, but that growth clearly slowed from the rates posted on the day after Thanksgiving (30%) and the following Monday (20%); the e-commerce technology vendor measured the same retailers for both years. “The thrill of Black Friday and Cyber Monday are over. Now it’s time for the rubber to hit the road to see if 2010 will turn out to be a successful season,” says Alan Fulmer, co-founder and executive vice president of Channel Intelligence. He says his firm still maintains its projection that online sales for the entire holiday season will be up 18% from last year.

Scot Wingo, CEO of ChannelAdvisor Corp., which helps retailers sell through online marketplaces and comparison shopping sites, says the deep sales and heavy promotions offered before and around Thanksgiving appear to have front-loaded the season in terms of sales more than in previous years. “Things have definitely slowed down a bit. I think we’re in a U-shaped situation and we are at the bottom right now,” he says. He says his clients’ same-store December sales are up 8.8% from a year ago. From Thanksgiving through Monday, growth was 26%, reflecting strong growth around the Thanksgiving holiday weekend.

Data from online traffic monitoring firm Compete Inc. bear out the suggestion of a sales trough. The percentage of consumers who visited leading e-retailers, such as Amazon.com, Walmart and Target, were up significantly year over year in the days leading up to Thanksgiving and through the following Monday. Data available through Dec. 6 show post-holiday weekend traffic dropped for several days but has again started to stir. Compete data also show that consumers who shopped online spent an average of $202 online from the Tuesday after Thanksgiving, Nov. 29, to Dec. 5, slightly less than the $205 spent by shoppers the week before.

Fulmer and Wingo say they expect sales to rise again this coming Monday and Tuesday, even though they expect that e-retailers won’t offer discounts as deep as they did nearer Thanksgiving. Online sales have peaked on comparable days in previous holiday seasons. After online sales broke the billion-dollar barrier for the first time the Monday after Thanksgiving this year, comScore Inc. chairman Gian Fulgoni predicted online sales would post several more billion-dollar days before Christmas, including Monday, Dec. 13, and Tuesday, Dec. 14.

E-retailers reduced promotional activity during the last week, according to an Internet Retailer canvas of the top 100 e-retailers as rated by the Top 500 Guide. Retailers, including The Gap and REI.com, haven’t altered their lead offers on their home pages in more than a week, and others, such as Abercrombie & Fitch and Harry & David, led with free shipping offers.

73 of the top 100 e-retailers offered some form of free shipping during the past week, up from the 62 that did so before Thanksgiving. Several made their offers more attractive by lowering the minimum order threshold or throwing in some extras. Victoria’s Secret halved the minimum order requirement to $50 from $100. Fashion retailer Yoox.com went from having  no apparent free shipping to offering it on all orders, and Neiman-Marcus sweetened its free shipping deal on orders by offering free three-day expedited shipping with a promotional code and even free gift wrapping. Apple offered free shipping on all orders of $50 and up after weeks of only offering it with select products, and Dell slashed its minimum order to $49 from $699. Nike.com was one of the few e-retailers that removed the free shipping offer it had available last week and instead is promoting holiday gifts and its mobile app on its page for the U.S. market.

Some e-retailers continued to use Facebook to offer consumers coupons for clicking that they Like the brand. That’s not surprising, given a recent report from Empathica Inc. that 40% of consumers say they are looking for coupons or deals via social media.

For instance, Overstock.com offered consumers who Like its brand a coupon for 10% off a consumer’s entire order, HSN offered up to 20% off a purchase and free shipping and a $10 gift card to consumers who spend $50 or more.

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