Internet shoppers, start your mice. The World Wide Web is decked out and waiting for you to click through its hyperlinked holiday madhouse. What can you expect to find? Probably less than you want in price discounts and time savings, but more than you might think in product selection, gift services and live customer help.
If you choose to buy gifts online, you will be clicking into an all-out e-tailing war among the dot-coms, whose numbers have multiplied since the last holiday season. As these companies scramble to build sales fast and establish themselves as category leaders, they are throwing in shipping for free, giving away gift certificates and, yes, holding down prices.
Enough retailers are selling at or below cost that all online merchants are feeling the heat. The pricing pressure is intensifying as price-comparison tools such as mySimon and R U Sure get smarter about zeroing in on bargains.
The payoff--in sales volume, if not profits--could be huge. Current forecasts for online holiday spending vary widely, but most show a doubling from last year--for instance, Jupiter Communications predicts $6 billion in spending for this month and the next.
It's an ulcer-inducing time for many Internet retailers, analysts say, as investors are watching to see whether they can handle holiday sales volume and avoid the site outages, poor product selection and customer service glitches that disappointed shoppers last year.
Traffic at e-commerce sites has already spiked, causing some to slam their doors shut as too many people try to log on at once. In the past six weeks, the number of people visiting Web toy stores doubled, and the number stopping by cybermalls and superstores jumped more than 70 percent, according to Nielsen/NetRatings.
"The jump in mall traffic tells me that people want to enjoy the value of efficiency that the Internet offers," said Allen Weiner, vice president of Nielsen/NetRatings. "I can shop for everybody on my list at the same time at these online malls, and it saves time."
The Internet's major gateways are banking on people thinking like him. America Online, Yahoo, MSN.com and others are trying to offer a unified shopping experience to consumers by renting space to an abundance of retailers. Yahoo now provides checkout counters for more than 7,500 merchants, while AOL will be steering its 19 million subscribers to 275 well-known retailers.
The gateways also are offering digital "wallets" that collect customers' credit and shipping information, then hand those details over to such retailers as Lands' End and Gap. This is the first year that these software wallets are widely available.
"You now have the ability to choose across a wide variety of merchants very quickly in a way that you never could in the offline world," said Jeff Mallett, president of Yahoo. "It's an environment where merchants are being challenged to put out best-of-breed services, because their products are being showcased so widely."
At AOL, as well as a host of online shops, live clerks can answer questions via "instant messenger" chat boxes, giving shoppers the instant attention they have been demanding.
To further re-create the appeal of traditional upscale retailing, AOL hired Patrick Gates, a retail veteran who previously worked for upscale retailers such as Neiman Marcus and Barney's. He has also added slick, click-and-buy fashion catalogues and elaborate gift guides to AOL's shopping section.
Web retailers have spruced up their own sites, too, and are dotting the Internet with new stores. Their ranks now include dot-coms in every retail specialty you can think of. Need women's athletic wear? Lucy.com launched last week. Handcrafted Italian silk ties? Try Baldoria.com.
Retailers are offering jazzier displays, including realistic photos and three-dimensional views of their products. At SharperImage.com, shoppers can listen to music by clicking on the "play" button on a 3-D model of a portable compact disc player. At the sportswear site Boo.com, a ponytailed cartoon shopping assistant named Miss Boo gives advice about clothes.
To prepare for the onslaught that knocked many Web sites out of commission last December, the major sites have added computing power and customer service staff. But it's safe to say shoppers should expect some dead-end links, confusing navigation and occasional site outages.
At Victoria's Secret, waiting for a picture to load can make customers want to dash to the nearest mall. That is, if you're really at its online store to shop: People who want to buy something will have to wait in line behind the throngs of males gawking at photos of a scantily clad Tyra Banks.
NetRatings' Weiner said what happened to ToysRUs.com in recent weeks--the site has been turning away thousands of shoppers because it lacked computing power to accommodate them--may foreshadow even more trouble for online retailers.
"When they opened the new football stadium in Baltimore for the Ravens, they had a bunch of people go in all the bathrooms and flush at once," Weiner noted. "On the Web there is no way of testing the infrastructure, because the Web is unpredictable."
Mike May, an analyst with Jupiter Communications, said customers should be able to reach most online merchants but might see slowdowns during peak periods such as 1 p.m. to 4 p.m. and 5 p.m. to 8 p.m. Eastern standard time.
Before clicking the "buy" button, shoppers should check shipping and handling rates, as well as the time it takes to make deliveries. Look for retailers that offer free shipping deals, as well as online stores that cut prices to make the total order more affordable. And don't forget to look at a site's return policy as well.
The explosion in online shopping means Internet fraud is also booming. Shoppers reported 6,031 fraud incidents to the National Consumers League in the first half of this year, compared with 7,507 for all of last year.
Consumers seeking evaluations of sites can turn to services such as BizRate.com and Epinions.com. Industry researchers also say they should check the security and privacy policies of sites that are new or unfamiliar, and be wary of a Web site that looks like it was designed in a hurry.
"In the real world, consumers wouldn't buy from a run-down shack with no name on it," analyst May said.
But earlier concerns that online retailers' safety measures would fail and credit-card numbers would be stolen have proven to be unwarranted, said Holly Anderson, a spokeswoman for the National Consumers League.
"We have never had a complaint that a credit-card number was stolen online from a secured transaction on a legitimate Web site," Anderson said. Can you say the same thing of the unsecured, off-line marketplace of the shopping mall?