Strong start for online retail

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Despite slowdowns at several retail Web sites over the Thanksgiving holiday weekend and on Cyber Monday, an overall increase in traffic and sales suggests good things for the e-commerce channel this holiday season.

“If consumers have a good experience now, they will come back later in the season and next year,” said Larry Freed, president and CEO of ForeSee Results.

According to a survey by ForeSee, customer satisfaction with the online shopping experience increased very slightly, by 1.3% on Cyber Monday compared to last year. Satisfaction was slightly lower on this day than it was over the holiday weekend.

The decline was due in part to heavy traffic on Cyber Monday that caused slowdowns at many sites. ComScore Inc. said that the number of online buyers increased 38% that day. Buy.com and Eddie Bauer were among the sites that experienced notable slowdowns.

In a survey of 30 leading retail sites, one-third experienced significant slowdowns, especially in the product search and checkout portions according to Keystone, which measures online performance. More than half of the nearly 40,000 sites that subscribe to Yahoo's e-commerce service experienced slow-downs that prevented sales from being completed for several hours.

However, the decline in satisfaction is much smaller than previous years, according to Freed, who said that “retailers are clearly outperforming last year.”

One reason for this year's increase in traffic on Cyber Monday was a bigger reliance on promotions to drive sales. However, this strategy could take its toll on retailers' margins.

While sales increased 21% on Cyber Monday for a total of $733 million in spending, the average dollars spent per buyer was down 12%, according to ComScore. Besides deeper and broader discounts, the fact that new Cyber Monday buyers tend to spend less online than returning buyers played a contributing role in the drop.

The biggest traffic gainer among the major sites on Cyber Monday was shopping.msn.com, which saw a 261% jump in visitors compared to the four previous weeks, according to ComScore. Other winners include Overstock.com, which had a 139% increase in traffic, Circuit City, with a 136% gain and Best Buy, with a 110% jump.

 

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