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WinInfo Daily UPDATE--December 30, 2003

Tech Toys Trigger Holiday Sales Jump

Depending on which research firm report you read, 2003 holiday sales saw modest to strong improvement over last year thanks largely to sales of tech toys such as cell phones, digital cameras, High Definition Televisions (HDTVs) and MP3 players. Weather problems in the Northeast during mid December had analysts worried that the 2003 sales figures would decline sharply year-over-year, but a post-Christmas spending surge aided holiday sales. A huge increase in gift card sales during the holidays led to the post-Christmas spending surge. Internet based shopping also rose dramatically this year with e-tailers such as Amazon.com posting strong gains over 2002.

After analyzing sales at more than 30,000 retail outlets ShopperTrak reported that holiday sales during the week of Christmas jumped 24.6 percent over last year helping the December total leap 6 percent year-over-year. Sales in November 2003 were also up 5 percent year over year. "This should be the strongest holiday retail season since 1999," said Michael Niemira, the lead consultant at ShopperTrak. Holiday sales in 1999 rose 5.4 percent year-over-year. By comparison, holiday sales in 2002 rose just 0.5 percent year-over-year.

The International Council of Shopping Centers (ICSC) issued a report that noted that holiday sales were up by as much as 4.5 percent year-over-year. ICSC compiles its data from a group of major department discount and retail chain stores across the United States. Meanwhile, MasterCard Advisors, a division of MasterCard International, reported that total holiday sales adjusted for the extra day this holiday season were up 6.5 percent compared to 2002. According to MasterCard Advisors, Internet based and consumer electronics stores posted the strongest gains, whereas toy stores fell the hardest posting a 7.7 percent decline. Not to be outdone, Visa reported a 14.2 percent increase in sales year-over-year.

"Total online sales should exceed $100 billion in 2003, up 42 percent from last year," according to Forrester Research. Thanks to the 24 x 7 nature of the Internet and to the $17 million in Internet capable gift card sales. Christmas day has become a big shopping day as well, with sales hitting $85 million this year. Because 2003 is the first year that most gift cards have worked online it's the first year that analysts have tracked Christmas day sales. Also helping matters is the proliferation of broadband Internet accounts which make browsing e-commerce sites quicker.

Meanwhile, e-tailer Amazon.com reported its busiest holiday season ever with the company setting a single day sales record of more than 2.1 million products, which is about 24 items ordered every second. The company also shipped more than 1 million products to customers on its busiest day. It reported that more than 99 percent of its orders were delivered in time for Christmas. In addition Amazon.com sustained a usage peak of more than 630,000 customers during a 60 minute period on December 15.

 

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