Web sales up nearly 18% in December: MasterCard

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Online retail sales surged during the 2010 holiday shopping season, according to MasterCard SpendingPulse, a unit at the financial giant that tracks consumer spending.

December 2010 e-commerce sales increased 17.6% compared to the previous December, representing one of the strongest growth rates seen last year, said Mike Berry, director of industry research at MasterCard SpendingPulse.

Online shopping surged late in the holiday shopping season, with strong sales across categories, according to the organization. A few retail sectors showed slight weaknesses, mostly due to discounts. Electronics, where sales volume increased 1.2%, saw strong unit sales offset by falling prices for big-ticket items such as TVs and laptops.

Meanwhile, apparel sales were up 10.9% and luxury sales increased 8.5% compared to the previous December, according to SpendingPulse. Yet even in those sectors, online sales increased faster than offline. Online electronics sales rose 14% despite price deflation, while Web-based apparel sales were up 28.8%, year-over-year.

Online retailers promoted their items with free shipping, targeted discounts and their own versions of doorbusters significantly this holiday season, said Berry. Bad weather in many parts of the country during peak shopping days also boosted online merchants.

"Anything that keeps people out of brick and mortar stores – if they're still in the mood to spend, they're going to gravitate to the e-commerce channel,” he said. “We put some of the iffy weather with the good deals…that adds to a pretty good season.”

The sales spike reversed an early 2010 trend of online sales growth leveling off as the channel matured. Berry noted that department store sales were down 2.5% year-over-year, but they were up 14.7% online.

“That channel just continues to eat up share from bricks-and-mortar,” he said. “We were starting to wonder if we were starting to see some saturation in that channel, but things turned around in the last quarter.”

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