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Online sales set to jump
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October 11, 2000: 1:27 p.m. ET
More Internet access, retail entrants presage fierce holiday competition
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NEW YORK (CNNfn) - Online holiday sales are expected to nearly double this year as more shoppers have access to the Internet and retailers become more savvy at marketing and customer service, two reports said.
Both Nielsen/NetRatings and Gomez Advisors, two e-commerce research firms, issued reports this week forecasting a huge jump in online sales. The Nielsen report, issued Wednesday, predicts 55 million people will do their holiday shopping online this year, a 14 million increase from last year.
 Gomez said Tuesday it expects online holiday sales to grow to $11.4 billion, up from about $7 billion last year.
That's a bit shorter than predictions by other researchers of $19 billion in spending, but the overall trend is clear: People will buy more gifts on the Internet.
Nielsen//NetRatings said 146 million people had access to the Web in August, a 35 percent increase from a year ago. And those people are spending an average of about a half hour online at a time, 15 percent longer than they did a year ago.
Where 1999 was a breakthrough year for shopping online, this year is expected to be a precarious one for e-tailers as they struggle to prove they've done away with order fulfillment and customer service problems that plagued many of them last year.
Competition for toy sales is expected to be particularly fierce this year as Toysrus.com, the online division of the nation's No. 1 toy retailer, tests its new partnership with Amazon.com and the millions it spent on building massive distribution centers and ramping up its behind-the-scenes operations.
And with 35 percent more people having access to the Web, the pressure is on to prove to customers that they've mastered the process.
"This year seems to be more business as usual for online retailers," Lisa Strand, senior analyst for e-commerce strategies for Nielsen//NetRatings said. "Last year people went online because it was new, it was novel. Last year being more experimental, being new and novel, retailers could get away with a little bit more. But this year, people expect more."
So-called pure play, or Internet-only, retailers will face stepped-up competition from traditional brick-and-mortar retailers such as Best Buy and Toys 'R Us, which have either re-launched their online efforts or are first-time entries. The strength of recognized brand names is expected to put pressure on the pure plays, Strand said.
"Holiday 2000 will be the revenge of the brick and mortars," Sean Kaldor, Nielsen//NetRatings' vice president of e-commerce, said. "Battle lines on the Internet are being drawn between the offline brick and mortar stores and the Internet pure plays. Offline giants such as Old Navy, Kmart and Best Buy, all of which had little or no Web presence last year, are poised for extraordinary growth during this holiday season." 
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