How the e-businesses stole Christmas
Internet traffic escalated as consumers took advantage of on-line holiday purchases, while distribution centers attempted to keep up.
By Staff -- Modern Materials Handling, 2/1/2000
Santa was a little late with a few items this past Christmas. But all in all, e-commerce had a successful holiday season.E-commerce traffic increased 27% during Christmas week compared to the same week a year ago, according to Media Metrix, an e-commerce measurement service. The top ranking five sites in order where Amazon.com, Ebay.com, Etoys.com, Barnesand-noble.com, and Toysrus.com.
According to a New York Times/CBS News poll of 1,026 adults conducted Dec. 17-19, 17% of those polled bought gifts over the Internet this holiday season. In 1998, only 7% turned to their computers for Christmas shopping.
In addition, the poll revealed that 62% of those who shopped for gifts on-line said the experience was better than shopping in a store. Only 8% said it was worse.
So what was the secret of Amazon.com's success?
"We have an obsession with our customers and we dedicate every ounce trying to meet customer promises," says Amazon.com spokesperson Lizzie Allen. "It also helps that this was our fifth Christmas, and other dot-coms are just jumping into the market now."
Amazon.com was able to fill 99% of its holiday orders with seven distribution centers in the U.S. and two in Europe. "We've spent a lot of time and money building our DC network," says Allen.
Toysrus.com, although one of this year's top sites, did hit a bump in the road. Only one distribution center located in Memphis, TN was responsible for filling millions of orders. But the toy retailer compensated disgruntled Internet shoppers with $100 coupons for those who did not receive their gifts in time for Christmas.
"Internet retailers must solve their infrastructure problems or suffer consequences," says Steve Johnson, Andersen Consulting partner and co-director of the firm's e-commerce program. "Thirty-five percent of on-line shoppers who experienced problems on a particular site left that site for another. E-tailers can't continue to lose one of every three consumers and expect to survive. Their top concern must be infrastructure improvements."
E-businesses weren't the only ones to profit from the holiday Internet rush. The U.S. Postal service delivered about 4.3 million packages on December 23, more than doubling its average volume. Federal Express says its volume was up 20% for the holiday season.
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