Amazon.com Inc has seen sales increase by almost one quarter this holiday season as US shoppers compare prices on line, searching for the best bargains.
Online sales rose 23 percent to US$7.13 billion between Nov. 1 and Dec. 13, compared with the same period a year earlier, said ComScore Networks Inc, a Web research company. That included US$288 million of sales on Dec. 12, the top Internet selling day so far, the research firm said.
Web sales were expected to peak last week because many people wanted to finish purchases to avoid paying for last-minute shipping expenses, analysts said. Online gift buying is increasing as people avoid holiday crowds and become more comfortable using the Internet, they said. Consumers also are going on line to comparison shop for low prices.
"It's just easier," said Debra Dinardo, 32, of Princeton, New Jersey, who expects she'll do 20 percent of her holiday shopping on the Internet this year, compared with none last year. "You can do a lot of comparison shopping on line."
A survey by BizRate.com shows found that 54 percent of Internet shoppers are more intent on finding low prices than they were last year. Shoppers said tighter holiday budgets were the reason.
Amazon.com, the world's biggest Web merchant, has offered a US$30 certificate to buyers of US$50 or more at its new apparel store in addition to discounts on books, software and other items.
Overstock.com, an online seller of discount liquidation and surplus merchandise, said sales this month through Dec. 14 increased almost threefold to US$16.6 million compared with a year earlier.
"Although price has always been an issue, it does appear to be a strong motivator this year," said Lori Inventosch-James, director of e-commerce research at Harris Interactive Inc, a market-research firm. Forty percent of those surveyed by the company in November said lower prices were the reason why they'd shop on the Web instead of at traditional stores.
At UncommonGoods.com, a closely held retailer of hard-to-find gifts and merchandise, sales are about 2.5 times last year's level, Chief Executive Officer David Bolotsky wrote in an e-mail.
"Sales are running ahead of expectations," wrote Bolotsky, a retail analyst.
Bolotsky didn't offer free shipping at his site. Analysts are waiting to see whether Amazon.com's offering of free-shipping for certain orders of US$25 or more, along with its discounts, will help generate enough orders to offset a loss in shipping revenue and narrower gross margins.
Amazon.com has forecast fourth-quarter sales will increase as much as 28 percent to US$1.43 billion. During the third quarter, the company said its loss from shipping rose to US$10 million from US$2 million a year earlier. The free-shipping program will reduce shipping revenue as a percentage of sales and lower gross margins, Amazon.com said.
"I fully expect that they'll come in with the expected [sales] range," said Ken Cassar, a Jupiter Research analyst. "The only question is their margins."
The sales increase for US online merchants compares with a 4 percent gain forecast in total retail sales by the National Retail Federation. Many traditional merchants are cutting prices to attract shoppers because of worries tied to anxiety about the economy.
Web shoppers share the same concerns and Internet spending would be higher if such worries weren't present, Cassar said.
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