Online sales defy downturn

Online shopping destinations report that, despite the economic gloom, they are still doing brisk holiday business and that, thanks to a variety of new bells and whistles, they are becoming more sophisticated merchants.

"This will be our biggest season ever," said Chris Cunningham, acting CEO of San Francisco-based RedEnvelope, which sells a variety of gift items ranging from tools to jewelry and home decor.

This holiday season, RedEnvelope is using analytical CRM software from Kana to gain insight into customer behaviours.

"We use the analytics to obtain a deeper understanding of how customers are seeing our products, and on the basis of that understanding, we make a decision as to where that product is going to be in the store," Cunningham said.

Meanwhile, industry analysts have supported the e-tailers' experiences, reporting that most shopping sites have overcome the negative effects of the recession and the September 11 terrorist attacks.

The Jupiter Media Metrix Online Shopping Index, for example, recently reported 50.2 million unique visitors during Thanksgiving week, up from 35.2 million a year ago.

However, one point of conflict seems to stem from a report by Internet performance analysis company Keynote, which said last week that it found e-tailers were taking longer to fill orders thus far this season when compared with the entire holiday shopping season of 2000. Orders on average have required 150 hours for delivery, as opposed to 111 hours last year.