Holiday Numbers Are In

THE NUMBERS are pouring in from the busiest holiday shopping season ever, and the facts are indisputable: Despite an overall bigger showing from brick-and-mortar retailers, pure Internet dot-coms won last year's business-to-consumer electronic-commerce contest.

But as brick-and-mortar companies continue to learn their lessons on the Internet and dot-com companies eye larger pieces of the retail market, experts say there may not be a difference between the two in a few short years.

This past holiday season was the first in which traditional brick-and-mortar stores had significant presence online. But the numbers are showing that the old guard still has a lot to learn when it comes to making sales over the Web.

"Pure Internet companies by far won the day," says Jamie Hale, manager at merchant initiatives for NextCard, a San Francisco-based online credit card company that provides retail market data as a service to its customers. "It's about the user experience and merchandising. When you have a new medium, you have to present products in an easy way. The Internet companies did a far better job of that."

Of the top 10 online performers in attracting visitors, only and came from brick-and-mortar roots, according to Media Metrix, a New York-based analysis company. According to NextCard, the pure Internet companies were more successful in converting visitors into buyers (see chart, at right).

Analysts believe that brick-and-mortar companies hold core competencies in moving massive amounts of product to retail outlets efficiently but have yet to master shipping small orders to consumers in a price-effective manner. Also, designing Web sites and merchandising online is still not a top priority for a company that sells 98 percent of its products through retail stores, Hale said.

"Mass retailers don't know much about order fulfillment on a one-time basis," says Robin Lanier, senior vice president for industry affairs at the International Mass Retailers Association, in Arlington, Va. "Nothing turns a consumer off more than when you get sucked in, you want the product, and they don't have it. Brick-and-mortar retailers need to figure out these issues, and they're starting to."

Some observers contend that catalog companies have made a fairly clean transition to e-commerce. Up-market household-goods retailer Williams-Sonoma, which had total Internet sales of $6 million for its Christmas season, has a built-in customer base and infrastructure to go to the Web, noted Pat Connolly, executive vice president at Williams-Sonoma's direct customer division, in San Francisco.

Conventional wisdom says it is only a matter of time before brick-and-mortar companies get their act together and provide real competition online for some of the established Internet players. Given the power of their established brands and multiple retail channels, the heat will turn up on the dot-coms.

"When people become comfortable and familiar with a brand, they will come to the stores that they recognize, and this definitely gives the customers a choice -- to shop online, in the stores, or by catalog. By allowing them to shop how they want to shop, we are able to win more customers," said Lisa Lanspery, a spokeswoman for, in New York.

Many analysts believe that the model that Barnes and Noble espouses will eventually become the standard, and there will no longer be a dichotomy between dot-coms and brick-and-mortar companies. Alliances, acquisitions, and new business units are likely to spring up over the next year as the pure Internet companies look to cash in on the lion's share of the retail market.

"We know as much about running a retail store as brick-and-mortar companies know about running a Web site," said Bill Curry, spokesman for, in Seattle.

"I think that ultimately the Internet and the brick-and-mortars will be very synergistic," Lanier says. "It is only a matter of time that Internet companies open stores. We have seen catalogers open stores, like J. Crew. The lines will blur and the Internet will just be one more store."

Eugene Grygo contributed to this article.

And the winners are

The following list ranks the top 10 e-commerce sites on the Web in terms of unique visitors. The chart measures performance between Nov. 15 and Dec. 31.

Merchant -- Average Holiday Purchase Price* -- $36.00* -- $64.63* -- $22.16* -- $25.91* -- $60.31* -- $19.53* -- $144.51* -- $52.32* -- $7.42* -- $18.65Source: NextCardWAL-MART CREATES ONLINE UNITRetail giant Wal-Mart rang in the year 2000 by relaunching its Web site, an online superstore that will compete with thousands of online retailers. The company also spun off as a separate company in an effort to accelerate development of the new site.

After delaying the launch of the revamped site earlier this year, Wal-Mart on Jan. 1 rolled out the online store, which is home to 24 different shops that include everything from travel planning to jewelry to pet supplies and has an easily navigated floor plan.

In addition to goods for sale, the site launched a new feature called My Wal-Mart, which is designed to offer personalized service online, including buying histories and faster checkout.

Analysts are already saying the new site will spell trouble for established e-tailers such as

"It's impossible not to compare Wal-Mart with Amazon, because Amazon has the strongest e-tailing brand and Wal-Mart has the strongest offline brand," says Brad Hill, a financial analyst at, in San Francisco. "Wal-Mart has the offline head start and their resources allow them to persevere in the online space in a cleaner way than Amazon has been able to."

Wal-Mart Stores Inc., in Bentonville, Ark., is at

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