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The eBay Effect: Holiday Shopping Season Booming Online?

 
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The holiday shopping season seems to have started out with more of a bang than a whimper - - especially online.

That wasn’t the scenario painted by the ever-negative mainstream media, who published wave after wave of articles bemoaning the lousy economic climate and predicting a disastrous holiday shopping season for retailers, both on- and off-line.

The number on Black Friday are just trickling in, and seem to already be up from last year. In 2006, more than $19 billion was spent on Black Friday alone – or about five percent of all holiday spending. This year, Mastercard’s Spending Pulse report said that Black Friday spending would finish over $20 billion, a five percent pickup from 2006.

Online shopping could even turn out better. eBay Inc., which comprises Shopping.com and PayPal, said shopping traffic was way up on Black Friday. “Early signs from a very busy Black Friday show that many shoppers are grabbing their mouse instead of their car keys this holiday season,” said Jim Griffith, eBay’s “dean of education”. “

According to eBay, Shopping.com’s traffic to merchants increased 61 percent over last year’s Black Friday, November 24, 2006, exceeding industry expectations. The analytical firm Forrester Research had predicted that online payments should top $33 billion this season, a 21 percent increase over the 2006 holiday season.

There could be a “shopping lag” that would show even more strength in the online holiday shopping season. Although Black Friday is an important online shopping day, data shows that shoppers are browsing and researching more on Friday, but buying more on the Monday after Thanksgiving, or Cyber Monday. Last holiday on Shopping.com, Cyber Monday traffic outpaced Black Friday by 19 percent. Thanksgiving Day has also become an increasingly busier online shopping day. PayPal found from 2003 to 2006 there was a 70 percent increase in total payment volume (TPV) in Thanksgiving Day online activity.

Additionally, based on the previous five years of PayPal’s online shopping research, data shows that Mondays are the busiest day of the week for online shopping and the second Monday in December is solidifying its place as the actual busiest online shopping day of the season. In 2006, online shopping activity on PayPal was 96 percent higher on the second Monday in December than on Thanksgiving Day.

The Hottest Online Gifts of 2007

eBay has listed some of this season’s most popular gifts based on shopping activity on eBay and Shopping.com.

Toys

Webkinz Pet Toys - $12 - $20, Shopping.com
Kidcraft Fashion Dollhouse - $136 - $180, Shopping.com
Dora the Explorer ABC Game - $5 - $15, eBay

The most searched for Webkinz pet on eBay is the Webkinz Seal. On Black Friday alone, 138 sold on eBay for an average selling price of $14.22.

For the Home

George Foreman Next Grilleration Grill - $30 - $120, eBay
Cuisinart Classic 7 Cup Food Processor - $100 - $149, Shopping.com
Cuisinart BrewCentral 12-Cup Coffee Maker - $48 - $90, Shopping.com

Based on searches and clicks, the Cuisinart BrewCentral Coffee Maker is the most popular coffee maker on Shopping.com and is available from 27 merchants.

Consumer Electronics

Nintendo Wii video game console - $100 - $425, eBay
Microsoft Zune 80 GB mp3 player - $210 - $420, eBay
Garmin StreetPilot c550 portable GPS device - $300 - $500, Shopping.com

The Nintendo Wii sold out in several retail locations on Black Friday, while 358 sold on eBay for an average selling price of $411.76.

Source: Forrester Research, eBay, Inc.

 
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Thats encouraging news.
Still, I have to wonder; $19 billion spent on Black Friday 2006, $20 billion in 2007. Does that actually translate in to more people buying more products, or does that simply reflect increased product costs, and in actuality far fewer people actually bought this year than last?
Also, considering retailers' costs, does a $20 billion start mean they are going to be as well into the black profit-wise as they were last year, or that they will reach the black at all?
I'm not trying to throw a damp towel on what at first looks like positive news, but I just wondered...

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