Trampled by millions of holiday shoppers last week, online toy retailer KBkids.com was forced to apologize to consumers as they waited to click inside its packed store and tried to appease the angry crowd with $5 coupons.
"We're not the only ones who have problems," said Srikant Srinivasan, chief executive of KBkids.com LLC of Denver.
No kidding. This holiday selling season, many customers face an unusual problem: They want to splurge on toys, consumer electronics and luxury goods but are having a hard time finding someone to take their money.
Over the past 10 days, tales of woe have been emerging from the online marketplace and traditional stores. At the malls, shoppers are griping about the lack of sales help and long lines at cash registers--the results of a continuing labor shortage. In cyberspace, they complain about Web store slowdowns and outages.
Analysts say an early Hanukah, which starts today, and a robust economy are partly to blame for the thick crowds after Thanksgiving Day. Based on checks only, Telecheck estimates that same-store sales--an industry barometer that measures revenue at stores open at least a year--rose a healthy 5.2 percent in the Nov. 26 to Nov. 28 period, compared with the year before.
Online retailers and shopping portals have reported much larger increases in traffic. The week of Thanksgiving, America Online Inc. said 4 million members made purchases, about 600,000 of its members buying for the first time on AOL. Spending tripled at AOL's shopping mall section. Yahoo, another Internet gateway, said it received more than twice as many orders between Thanksgiving Day and last Saturday as it did the same time last year.
In total, e-commerce traffic rose 30 percent from Nov. 24 to Nov. 28, as shoppers flocked to online toy, apparel and consumer electronics stores, according to Nielsen/NetRatings.
Although retail sales are expected to be robust this month and next, several industry observers wonder whether merchants are missing a golden opportunity to grab even more business.
At least one survey showed consumers avoided the malls this past Thanksgiving weekend. About 45 percent of consumers who said in early November that they planned to shop later in the month changed their minds and stayed home, according to the poll by America's Research Group.
Those who ventured outside indicated they thought there were few storewide discounts on the day after Thanksgiving. About 42 percent of shoppers said they were upset about poor service and a lack of sales help, while in previous years only a quarter of the consumers surveyed said they were displeased.
"You can't argue that there are still a lot of people out there shopping for Christmas," said Britt Beemer, chairman of America's Research Group. "The difference is that extra 10 percent" in sales.
Customers who rushed online to avoid the mob scene at the malls found some of the same problems at Web stores. Among the hardest hit have been online toy stores, which have faced enormous demand from parents seeking Pokemon products and other popular toys.
Last week eToys.com, Toysrus.com and Amazon.com's toy section slowed to a snail's pace during peak shopping periods. In fact, this paragraph and three others were written in the time it took to get into eToys.com--and you could file a few nails in the time it took to pull up photos of hot Pokemon products.
Some online retailers created their own headaches by blitzing the airwaves, said Jackie Price, a spokeswoman for Gomez Advisors, an e-commerce research firm.
"If Bloomingdale's does an ad . . . they know what the response will be," Price said. "Online retailers don't know. They place the ad and all of a sudden they have 3 million people banging on their door the next day."
More mature online retailers, such as Amazon.com and Eddiebauer.com, are more familiar with these surges and better able to adapt this year. However, they are not necessarily immune to slowdowns and blackouts, Price said.
Unfortunately for Web stores, the next shop is only a click away.
"If it's really slow, I just log off," said David Hong Yu, a 30-year-old software engineer who lives in Reston. "There are so many sites you can go to. And I don't like wasting my time."
It's the rare company that manages to elate customers with its errors. But last month J. Crew, one of the more experienced e-commerce retailers, surprised its shoppers with one of the best deals to be found in cyberspace.
Hundreds of shoppers flocked to its Web store last month after the company mismarked a $218 cashmere sweater for $18. J. Crew has since offered the customers a 40 percent discount on the sweaters, but isn't selling them for $18.
In the words of a J. Crew spokesman, it was an "unfortunate typo."
While "brick-and-mortar" store sales over the Thanksgiving holidays* showed a healthy rise of 5.2 percent, online sales were much more robust:
Percent change in online sales, Nov. 24 - Nov. 26
Computer hardware: 20.2%
Total online: 30%
*Nov. 26 - Nov. 28; for stores open at least a year
SOURCES: Telecheck, Nielsen//NetRatings
CAPTION: Shoppers flood into a Toys R Us store in Torrance, Calif., before sunrise on the day after Thanksgiving, one of the big shopping days of the year.