December 23, 2010

Online Retailers Pushing For Last Minute Christmas Sales

Online retailers, seeing a huge surge in holiday shopping, are pulling out all the stops to make sure last-minute shoppers get their gifts in time for Christmas, and many are even offering free shipping on orders placed as late as today.

"I've never seen anything like it," Joan Broughton told USA Today. Broughton heads Shop.org, the National Retail Federation's online division. "Shipping and shipping costs continue to be the big differentiators this late in the season."

That makes all the difference for one in five consumers who just started holiday shopping this week, according to a Consumer Reports poll released Wednesday.

Consumer buying tracker, IBM Coremetrics, says sales were up 23 percent Tuesday compared to the Tuesday before Christmas last year.

The number of transactions processed was up 50 percent over the same day last year, according to ChasePaymentech, which handles payments for 50 of the largest retail websites.

In-store shopping is surging as well. Shoppertrak, a consulting firm that monitors traffic in stores and malls, said Wednesday that retail revenue last weekend was up more than 5 percent over the same weekend last year. Sales for the weekend before Christmas in 2009 were down from 2008 by just over 6 percent, mainly due to the economic downturn and a big East Coast snowstorm, keeping many shoppers planted.

Thursday is the deadline for online shoppers to be guaranteed delivery of gifts by Christmas for 60 percent of retailers polled by the National Retail Federation (NRF); deadlines were set earlier in the week for nearly all of the other retailers.

Amazon.com said it will deliver products ordered on Dec. 24 the same day in some local areas for $3.99 per item. Neiman Marcus is offering free overnight shipping on any order placed by 12:59 p.m. EDT Thursday.

Other companies, including JC Penney and Tiffany's, are offering similar deals.

"Consumers are buying late in the season and retailers are really catering to that," John Squire, chief strategy officer at IBM Coremetrics, told USA Today's Jayne O'Donnell.

But all those holiday bargains comes at a cost. Some big online retailers may hold off on offering late-shipping deals next year.

They bring down the cost of shipping by adding distribution centers around the country and contract with other companies to do the shipping, said Broughton.

But still, "it is expensive," she told USA Today. That's especially true now that consumers "have an expectation that you should be able to get it almost at the last minute."