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Late Shoppers Help Online Retailers Sell More

By Griff Witte
Washington Post Staff Writer
Friday, December 31, 2004; Page E01

When it comes to shopping, Debbie Christian is a classic procrastinator.

Each year, the 47-year-old legal secretary from Maryland waits until the last possible moment to buy her holiday gifts, then pays the price when store lines are long and the traffic excruciating.

But this year was different. Though she started as late as ever, with a few clicks of the mouse, she sent scarves, pocketbooks and shoes flying to relatives across the country -- all online and all on time.

"I was a little nervous," Christian said, noting the gifts were timed to arrive on Christmas Eve. "But everything worked out perfectly. I didn't have to worry about the crowds."

Christian's spree helped contribute to a record holiday season for online merchants, one in which sales stayed strong late into December as more consumers put their trust in the Web to get last-minute gifts under the tree. They also turned to options such as ordering gifts online and picking them up at stores and made increasing use of online gift cards and other items that could be delivered by e-mail.

Online retailers sold $14.8 billion worth of goods and services between Nov. 1 and Dec. 26, a 29 percent increase over the comparable period in 2003, according to statistics released this week by ComScore Networks, which tracks online spending. The increase was particularly pronounced in the week before Christmas, when online sales hit $1.22 billion, 53 percent higher than the corresponding week last year.

"We expected a solid season," said ComScore senior vice president Daniel E. Hess. "But the results for the final two weeks are far beyond our expectations."

Online retailers have traditionally been shut out of much of the last-minute-gift business because of the uncertainty associated with ordering a present on the Web and having it delivered. Hess attributed this year's late-season surge to the public's growing confidence that online retailers will deliver their products on time. Memories are fading of past seasons in which certain online merchants failed to make good on their holiday promises, he said. Businesses, meanwhile, continue to push back their ordering deadlines and succeed in getting packages delivered on time.

"Retailers, and their shipping partners like FedEx and UPS, have really stepped up," he said.

The late strength of online sales mirrored the trend for retailers overall this holiday season. Sales in November were disappointing, spawning fears that Christmas 2004 would be less than joyous for merchants. But the procrastinators showed up with a vengeance in late December and managed to provide most retailers with strong results and needed momentum heading into the new year.

Although online sales make up only a single-digit percentage of the retail business, they have a powerful effect on consumer choices, with many people researching prices and selection on the Web before they hit the stores. Hess said 90 million people a week visited at least one retail Web site in the lead-up to Christmas.

With shortages reported for some popular items such as Apple Computer Inc.'s iPod, many consumers racing against the clock -- and against other shoppers -- opted this year for a hybrid retail experience that involved both highways and high-tech. At Best Buy, for example, the company's customers made frequent use of a feature that allowed them to reserve a particular item online, and then get in the car and pick it up at a local store.

Sears offered much the same service. "When the holidays were getting close, it became an important option for those not wanting to leave anything to chance," Sears spokeswoman Rochelle Mangold said.

The popularity of gift cards this year also contributed to high rates of online shopping, since they could be ordered anytime and show up in the recipient's e-mail inbox within seconds.

For much the same reason, flowers and gift baskets, which can generally be delivered the same or next day, made up the fastest-growing category of online purchases this season, ComScore said.

1-800-Flowers.com expanded its menu of same-day gifts beyond flowers, to baked goods and candy. Spokesman Ken Young said increased options helped keep the company's sales strong late into the season. "The biggest rush of business we had was in the last 10 days [before Christmas]. No question. And it built in those last 10 days," Young said.

1-800-Flowers.com, like many online retailers, was especially aggressive in marketing its ability to handle customers' last-minute shopping needs, sending regular e-mails reminding the slow-to-shop that it wasn't too late. That's not to say, though, that the company wants people to procrastinate. "It's not something we advise them to do," he said.

That advice is likely to fall on deaf ears with Debbie Christian. The same is true for Kadrea Lindner, 28, of Reston, a fellow procrastinator who did all her shopping for her friends and family in stores, but also bought $750 worth of presents for herself online as a test to see if they'd arrive on time. Next year, she's thinking of going online exclusively.

"It was convenient," she said. "And it worked."

© 2004 The Washington Post Company