Online Shopping Season Begins With Deals

Martha Carchi picks books at the Barnes & Noble Distribution Center in Monroe Township, N.J. on Tuesday, Nov. 21, 2006. Half of American consumers plan to shop online this holiday season, up from 36 percent three years ago, according to the National Retail Federation. "Cyber Monday," the first Monday after Thanksgiving, is the day that Internet retailers look for orders to surge. The 1-million square foot center handles individual internet orders as well as distribution for Barnes & Noble bookstores. (AP Photo/Mark Lennihan) (Mark Lennihan - AP)

Nevertheless, analysts are expecting a robust holiday season for stores and in cyberspace, though business will be slower than a year ago. The National Retail Federation expects total sales for the November and December period to be up 5 percent, but not as high as the robust 6.1 percent pace seen a year ago.

As for online holiday sales growth, JupiterResearch forecasts an 18 percent increase for online sales to $32 billion. That is slightly below the 23 percent pace in the previous year.

Analysts are carefully monitoring the rivalry between online-only stores and brick and mortar stores, which are overtaking the lead in the online market share wars. According to comScore, from 2003 to 2005, sales growth for brick and mortar stores' online divisions grew twice the rate of that of online-only merchants.

Stores that operate both e-commerce sites and physical stores are realizing they can "use the Internet to not only sell product but also drive traffic to their stores, " said Gian Fulgoni, chairman of comScore Networks.

Consumer electronics retailer Circuit City offered special coupons just for Monday, including additional savings of $100 on TV purchases of $1,700 and up, as well as an additional $50 savings on home audio systems purchases of $400 and up.

Throughout the holiday season, Circuit City is giving $24 gift cards to customers if their online order is not ready for pick up at the stores in 24 minutes.

Walmart.com, which redesigned its Web site earlier in November, unveiled Monday 50 online only specials offers, from cashere scarves to flat-panel plasma TVs, that will be available through Dec. 1. Carter Cast, CEO of walmart.com, said it will be replacing sold-out items with new offers this week.

Among the most popular items Monday on walmart.com were $289 GPS units by Garmin and 3 megapixel digital cameras by Philips.

The pure online players are fighting back with free shipping and other deals.

Online retailer Amazon.com pushed shoppers to get started early by holding an ongoing poll to select one steeply discounted gift item to be offered in limited supplies beginning on Thanksgiving day, on top of other deals.

Online jewelry retailer Bluenile.com is offering for the first time free overnight shipping to its best customers, a program that will run through Valentine's Day. It also sent out e-mails Monday offering 10 percent discounts to customers through Dec. 7.

Online closeout retailer Overstock.com for the first time offered free shipping offers, which started Thanksgiving Day and ends Tuesday, according to Patrick Byrne, CEO of Overstock.com.

"We're all competing on shipping promotions," Byrne said.