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Net Nabs Record Holiday Sales

12/27/2006 02:40:00 PM Eastern

New York — The e-commerce channel has earned holiday huzzahs for breaking new sales records and taking its place within mainstream retail.

Thanks to savvy online marketing and wider Internet and broadband adoption by consumers, Web-based sales from Nov. 1 through Dec. 20 were up 26 percent to $21.7 billion year-over-year, according to comScore Networks. E-tailers also lengthened their effective holiday season by extending on-time delivery guarantees to Dec. 21 and beyond. All this contributed to an all-time sales record on Dec. 13, comScore said, when consumers spent $667 million online in a single day, up 29 percent from the prior year.

What were they buying? Nielsen/NetRatings said consumer electronics was the third fastest-growing category for the week ending Dec. 10, up 27 percent year-over-year, following books/music/videos (up 46 percent) and toys/video games (up 49 percent).

Retailers confirmed the frenzy. Amazon.com said it enjoyed its best holiday season ever, with its busiest day falling on Dec. 11 when customers ordered 4 million items. Top CE sellers included iPods, Canon Powershot Digital Elph cameras and Garmin GPS systems. Newegg.com also reported robust holiday sales, although customers waited until the Tuesday before Christmas to send orders skyrocketing 40 percent year-over-year.

Multichannel retailers also had a field day online. Costco executive VP/cief financial officer Richard Galanti said sales at Costco.com were up 59 percent from September through November last year and would be well over $1 billion for 2006.

Circuit City said its Web-originated sales, aided by improved online checkout and solution selling, increased 67 percent during the same period and would also reach $1 billion or more in total revenue for the year. In a conference call, CEO Phil Schoonover said Circuitcity.com increased its market share 77 percent over the three months, and is now tied for third place in CE sales with Amazon.com, behind Apple and No. 1 seller Dell.

Sales at Bestbuy.com grew 30 percent during the period thanks to improvements to the Web site and its in-store pickup process, CEO Brad Anderson said.

Perhaps the biggest affirmation of e-tail came from First Lady Laura Bush, who told MSNBC last month that she does much of her holiday shopping online, under a pseudonym. She wouldn’t say where.

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