Windows shopping: E-commerce set to soar as holiday crowds pack online malls

The annual holiday e-commerce forecast is becoming a holiday tradition as venerable as Thanksgiving football and turkey. And judging by analysts' predictions and service providers' preparations, this year's selling season on the Web won't exactly be cold sweet potatoes.

Ernst & Young surveyed 1200 online shoppers and found that 67% of them plan to do at least one-tenth of their holiday gift buying via the Internet - a healthy increase from 23% in 1998.

And 19% of respondents said they will buy more than half their gifts on the Web, compared with only 4% in 1998.

Total expenditures reflect those increases. The Ernst & Young study claims that U.S. sales on the Web should reach $12 billion to $15 billion in the last six weeks of this year. That's about four times last year's total of $3 billion to $4 billion and equals consumer sales on the Web for the other 46 weeks of 1999.

"Christmas '97 was a field test, and '98 was a wide-market trial," said Edward Skoura, an analyst with Lisle-Ryan Investment Funds. "This year, e-tailers are out to win market share for the coming year."

In some ways, e-commerce more closely resembles traditional bricks-and-mortar retailing. For one, with the spread of Internet-connected households, women now account for more than half of all sales on the Web.

But familiarity breeds contempt for crashed Web sites and error messages. "Any dot-coms who haven't stress-tested their sites for peak crowds are asking for trouble," said Kirk Casey, e-commerce analyst with ANC Market Data. "Holiday success used to depend on advertising. Now it's a matter of five nines reliability from your Web host and a service provider with a redundant network."

Internet providers and Web portals are providing new online malls and enhancing existing shopping channels with ease-of-use features. America Online plans to bulk up its ShopAOL service with applications such as an electronic wallet that stores 10 credit card numbers and 50 addresses and a tool bar that flips users among gift categories with a single click. Users can get help from AOL's customer service department by phone, e-mail or AOL's Instant Messaging service.

Cable Internet provider Excite@Home launched a new shopping service last week. The Excite Shopping Service will allow visitors to the Excite.com portal to search for specific products, compare prices and request to be notified by e-mail when an out-of-stock product becomes available.

Unlike competing e-commerce sites that cluster shopping in a separate online mall,the Excite Shopping Service integrates shopping throughout its entire portal so users of any of Excite.com's various services can access relevant shopping links.

Finally, Internet portal Snap.com and e-commerce specialist XOOM.com have partnered to create Snap Shopping, an Internet shopping center with MyWallet technology and a Price Alert feature that notifies consumers when a product they want is available at a price they specify.

As an e-commerce newcomer, Snap Shopping will be bucking the more familiar shopping brands, from AOL and Yahoo! to Amazon.com and eToys. To stay in contention, Snap Shopping plans to spend $45 million promoting its new shopping site - much of it on ads that will run on NBC, one of Snap.com's parent companies.