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Online Holiday Sales Are Off to a Good Start

8 Dec, 2002 By: Joan Villa

Shoppers searching for bargains gobbled up DVDs and DVD players to help boost Web sales 41 percent year-over-year, to $1.5 billion, for the Thanksgiving week ended on Black Friday.

Purchases showed no signs of abating last week, with sales climbing 49 percent, to $389 million, on Monday, Dec. 2, vs. the equivalent day last year, reported comScore Networks. Consumers' buying flurry helped dispel fears that e-tailers would suffer as a result of six fewer shopping days between Thanksgiving and Christmas compared to 2001.

“I was worried the short shopping season would do a lot of damage to online retailers, but I think my worst fears were not realized,” admitted Ken Cassar, retail analyst for Jupiter Research. “Thus far the sales numbers look pretty good and about in line with what we were expecting.”

Online retail giant Amazon.com sold 70 percent more DVD players this November than it did in November 2001, with the No. 1 seller a Toshiba five-disc DVD/CD changer deeply discounted at $99.99, the retailer reported. Without disclosing actual sales, Amazon's “Delight-O-Meter” reported a total 24 million items sold between Nov. 1 and Nov. 28, and that climbed another 5 million units after the four-day weekend. DVD players, DVDs and DVD boxed sets were the most popular categories ordered following cell phones, Amazon said.

“In the mind of the customer, once people exit Thanksgiving their focus shifts to holiday shopping and we see a retail spike at that time,” explained Stefan Pepe, Amazon's group merchandising manager for video and DVD. “DVD will be a strong gift for the holidays.”

Best-selling titles included New Line Home Entertainment's platinum extended edition and collector's gift set of The Lord of the Rings: The Fellowship of the Ring; both widescreen and full-screen editions of 20th Century Fox Home Entertainment's Star Wars: Episode II -- Attack of the Clones; Columbia TriStar Home Entertainment's Spider-Man; and HBO Video's Band of Brothers. Boxed sets also topped sales, led by MGM Home Entertainment James Bond 007 Special Edition DVD Collection, Back to the Future -- The Complete Trilogy, “The Simpsons” second season, and the first seasons of “24” and “Babylon 5,” the company reported.

To entice DVD sales of such hit films as Ice Age, Harry Potter and the Sorcerer's Stone and Monsters, Inc., Amazon arranged with the studios to offer unique “sneak peeks” of deleted scenes or making-of footage from the upcoming discs that had never before been seen, Pepe said.

“For customers who come and preorder, they can get a sneak peek of some of the content that's on the DVD on a stream that we place in the customer's digital library, where they can come back and look at that content again while the promotion is running,” he noted. “We're looking forward to doing more of that next year.”

Over the holiday weekend, Amazon courted gift purchases with discounts and free shipping that extend through Dec. 10, but orders placed as late as Dec. 19 will still arrive in time for the holidays for an extra charge, Pepe said.

Jupiter's Cassar has forecast 17 percent growth in online sales this holiday. However, to reach that in the short season, sales must climb 40 percent to 50 percent on a daily basis, he said, while a sales increase of 20 percent to 30 percent would merely keep pace with last year.

“The most important challenge this holiday season is in moving sales early,” he contended. “From the early data I've seen, it appears they've been able to accomplish that.”

Cassar believes books, music and video will be the most popular online gift items this year, with Amazon leading the e-tail pack.

“There are a number of companies that sell CDs and DVDs, but there tends to be quite a bit of distance between Amazon and the rest of the pack,” he observed. “For example, Amazon now runs the Virgin Megastore and will shortly be running the CDNow music store, [making] Amazon's music business certainly one of the biggest on the Web.”

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