Online shopping may benefit from economic uncertainty and nation’s mood

An uncertain economy and the events of Sept. 11 not withstanding, online retail may see a 30% to 50% uptick this year over last year’s holiday shopping season, says David Fry, CEO of e-commerce systems integrator Fry Multimedia. Fry, whose clients include leading e-retail sites such as Godiva, Coach, and others, notes that among his clients and across the board, volumes were back up and above trend lines seen prior to Sept. 11 by the end of the month. “The level of activity seems to have come back up. I’m confident and hopeful that this will be a decent holiday season online for retailers,” he says. “Given that the general mood of the economy has been one of malaise, I think we’re going to be surprised by the success of online shopping relative to the general atmosphere.”

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The web channel plays a unique role in driving sales at the holidays, he notes, as demonstrated by sales patterns of the past few years. The Friday and Saturday after Thanksgiving are famous in retail as peak shopping times, for instance, but that’s not true online, he says. “The Friday and Saturday after Thanksgiving are actually less of a shopping period online. My theory is that people like to go to the mall early and get in the Christmas spirit, then they get tired of standing in line and go home to log on and shop.”

Predictions of decent online spending aside, some web retailers still could face trouble this holiday if haunted by the ghost of fulfillment problems past, Fry adds. Beset by fulfillment problems during Holiday 1999, some retailers spent big during 2000 to address the issue. “Some went overboard in 2000 in spending a lot of money on redundancy in fulfillment and infrastructure,” he says. “But this year we’re seeing some scrimping on that with some retailers. Some had web sites hosted in two locations, for example, but to save money, they’ve cut back on that. I wouldn’t be surprised to see some who are trying to cut corners in this bad economy get bitten by it.”