Online shoppers raid toy stores

Summary:As Web shopping days for Christmas dwindle, it becomes harder and harder for the record number of shoppers to find the right toys.

Online shopping sites can take a collective sigh -- their perseverance during the tough year may be paying off.

Holiday shoppers are flocking to the Web at an increasing pace, with a bigger seasonal boost than last year -- and huge increases in some categories, like clothing. Of course, it's not all good news: Shoppers looking for toys may be in trouble as the leading sites are out of many hot items.

The number of online shoppers is up 53 percent since the beginning of the season, compared with a 40 percent surge in shoppers last year, according to data from Nielsen/NetRatings. And the total weekly visits to shopping sites is up 78 percent since the end of October.

"Online holiday shopping got off to a late start this year, but has recovered with strong and consistent growth," said Sean Kaldor, vice president of e-commerce at NetRatings. "In the last five weeks, holiday shopping growth has consistently exceeded last year's results, and the trend indicates that there is at least one more week of favorable growth ahead."

The big winners seem to be clothing stores -- which saw a 24 percent increase in traffic last week over the previous week and a 130 percent spike since the beginning of the shopping season -- followed by consumer electronics sites, which are up 111 percent since the beginning of the season.

Peggy O'Neill, director of analytic services and principal analyst at NetRatings, said that the increased interest in clothing online reflects the changing demographics of the Net.

"Who does the Christmas shopping? Typically, the female in the household, and women are more likely to buy apparel than men," said O'Neill. "And we have more women online now."

Another reason is the increase in Web sites of traditional stores with familiar brands -- such as Gap.com and Nordstrom.com -- which helps alleviate some of the past fears of a big hassle if the clothes don't fit. Now, shoppers who don't like an item can simply go to the mall to return it.

Across the board, shopping sites are getting better at the fundamentals -- customer service and delivering the items -- according to a separate study by Andersen Consulting. The group found that 92 percent of attempted purchases were successful this year, compared with 75 percent last year.

"This study, conducted for the first time during the 1999 holiday season and again in 2000, shows that online holiday purchases are a better option for shoppers this season compared to last season," said Robert Mann, associate partner of Andersen Consulting. "The study suggests that online U.S. e-tailers learned from their mistakes last year, developed strategies to address e-fulfillment and supply chain issues, and more importantly, improved their execution, making great improvements that consumers will value."

The Andersen study also found that the average time required to make a purchase online dropped 25 percent -- from 12 minutes last year to nine minutes this year. And more sites are providing e-mail confirmations when the order is placed and shipped -- and providing an expected delivery date.

The last date for shopping in order for the product to be delivered in time for the holiday is rapidly approaching at most sites. But for some items, like popular toys, it may be too late.

Prudential Securities analyst Mark Rowen went on a toy hunt at Amazon.com (amzn), eToys Inc. (etys), KB Kids, and Wal-Mart. In a report issued Thursday, Rowen claims to have found more stock shortages at the joint Amazon's Toys "R" Us (toy) store than at other online toy retailers. The Amazon co-branded site was out of 48 percent of the 52 toys tested by Prudential Securities. The sought-after toys ranged from classics such as a Radio Flyer wagon to hot, must-haves of the season like the Barbie Beetle. eToys fared better with 65 percent of the toys in-stock, followed by KB Kids (63 percent) and Wal-mart (60 percent).

Rowen suggested there may be glitches in the relationship between Amazon and online partner Toys "R" Us. "It seems they don't have as much access to (Toys "R" Us) physical store inventory as they lead us to believe," says Rowen.

Amazon and the national chain launched the co-branded toy store in September. Last year Web site crashes at Toysrus.com and late deliveries left customers fuming.

A spokeswoman for the online unit of Toys "R" Us, which handles order fulfillment and inventory control, blasted the Prudential Securities report. Earlier this month Toys "R" Us had announced that its in-stock inventory in stores was the best in a decade and that its Internet stock was strong as well.

"Any suggestion that our in-stock position is not good is incorrect," says Toys "R" Us spokeswoman Jeanne Meyer. Of the top 1,500 best-selling items at the site, "we are more than 85 percent in-stock," says Meyer.

Until Thursday, Amazon had been allowing customers to sign up for e-mail notification in case the toy or game they wanted came back in stock and could be delivered in time for Christmas. "At this point in the season, it's really, really important to let people know where they stand," she says.

However, a search by MSNBC.com for some hot toys turned up shortages all around.

Of the four sites tested by Prudential Securities, only eToys had a good supply of the popular Bear in the Big Blue House plush dolls. KBKids.com was the only store still stocked with the Harry Potter Trivia Game, and it had a good supply of Hasbro's Poo-Chi electronic dog as well. Amazon had the robotic dog in one color. eToys had the Super Poo-chi dog and a notification that the cat models were "coming soon."

Another hot interactive toy, Mattel's Diva Starz dolls, could be found at Amazon (two of the four different models were unavailable), although eToys was completely sold out. KBKids.com didn't carry the dolls. Walmart.com carried three of the four trendy, "cool talkin'" teen dolls.

None of the four stores had the Barbie Volkswagen Beetle in stock. Despite the toy sellouts, the overall online shopping experience for consumers has improved dramatically, a new study finds.

But one company is offering hope for last-minute shoppers. Online delivery company Kozmo.com announced it will be running its one-hour delivery straight through the holidays -- including Christmas and New Year's days.

"Last holiday season, many online shoppers were disappointed when their gifts didn't arrive on time. Kozmo is the solution for all shoppers, including last-minute shoppers, who will have the satisfaction of knowing their gift will arrive e-mmediately," said Gerry Burdo, president and CEO of Kozmo.com. "And unlike other online retailers, you can even place an order with Kozmo on Christmas Day and it will be delivered right away."

The company, which originally just offered snacks and other sundries, has expanded its selections to include DVDs, CDs, electronics, gifts, and, yes, even some toys. Online shopping sites can take a collective sigh -- their perseverance during the tough year may be paying off.

Holiday shoppers are flocking to the Web at an increasing pace, with a bigger seasonal boost than last year -- and huge increases in some categories, like clothing. Of course, it's not all good news: Shoppers looking for toys may be in trouble as the leading sites are out of many hot items.

The number of online shoppers is up 53 percent since the beginning of the season, compared with a 40 percent surge in shoppers last year, according to data from Nielsen/NetRatings. And the total weekly visits to shopping sites is up 78 percent since the end of October.

"Online holiday shopping got off to a late start this year, but has recovered with strong and consistent growth," said Sean Kaldor, vice president of e-commerce at NetRatings. "In the last five weeks, holiday shopping growth has consistently exceeded last year's results, and the trend indicates that there is at least one more week of favorable growth ahead."

The big winners seem to be clothing stores -- which saw a 24 percent increase in traffic last week over the previous week and a 130 percent spike since the beginning of the shopping season -- followed by consumer electronics sites, which are up 111 percent since the beginning of the season.

Peggy O'Neill, director of analytic services and principal analyst at NetRatings, said that the increased interest in clothing online reflects the changing demographics of the Net.

"Who does the Christmas shopping? Typically, the female in the household, and women are more likely to buy apparel than men," said O'Neill. "And we have more women online now."

Another reason is the increase in Web sites of traditional stores with familiar brands -- such as Gap.com and Nordstrom.com -- which helps alleviate some of the past fears of a big hassle if the clothes don't fit. Now, shoppers who don't like an item can simply go to the mall to return it.

Across the board, shopping sites are getting better at the fundamentals -- customer service and delivering the items -- according to a separate study by Andersen Consulting. The group found that 92 percent of attempted purchases were successful this year, compared with 75 percent last year.

"This study, conducted for the first time during the 1999 holiday season and again in 2000, shows that online holiday purchases are a better option for shoppers this season compared to last season," said Robert Mann, associate partner of Andersen Consulting. "The study suggests that online U.S. e-tailers learned from their mistakes last year, developed strategies to address e-fulfillment and supply chain issues, and more importantly, improved their execution, making great improvements that consumers will value."

The Andersen study also found that the average time required to make a purchase online dropped 25 percent -- from 12 minutes last year to nine minutes this year. And more sites are providing e-mail confirmations when the order is placed and shipped -- and providing an expected delivery date.

The last date for shopping in order for the product to be delivered in time for the holiday is rapidly approaching at most sites. But for some items, like popular toys, it may be too late.

Prudential Securities analyst Mark Rowen went on a toy hunt at Amazon.com (amzn), eToys Inc. (etys), KB Kids, and Wal-Mart. In a report issued Thursday, Rowen claims to have found more stock shortages at the joint Amazon's Toys "R" Us (toy) store than at other online toy retailers. The Amazon co-branded site was out of 48 percent of the 52 toys tested by Prudential Securities. The sought-after toys ranged from classics such as a Radio Flyer wagon to hot, must-haves of the season like the Barbie Beetle. eToys fared better with 65 percent of the toys in-stock, followed by KB Kids (63 percent) and Wal-mart (60 percent).

Rowen suggested there may be glitches in the relationship between Amazon and online partner Toys "R" Us. "It seems they don't have as much access to (Toys "R" Us) physical store inventory as they lead us to believe," says Rowen.

Amazon and the national chain launched the co-branded toy store in September. Last year Web site crashes at Toysrus.com and late deliveries left customers fuming.

A spokeswoman for the online unit of Toys "R" Us, which handles order fulfillment and inventory control, blasted the Prudential Securities report. Earlier this month Toys "R" Us had announced that its in-stock inventory in stores was the best in a decade and that its Internet stock was strong as well.

"Any suggestion that our in-stock position is not good is incorrect," says Toys "R" Us spokeswoman Jeanne Meyer. Of the top 1,500 best-selling items at the site, "we are more than 85 percent in-stock," says Meyer.

Until Thursday, Amazon had been allowing customers to sign up for e-mail notification in case the toy or game they wanted came back in stock and could be delivered in time for Christmas. "At this point in the season, it's really, really important to let people know where they stand," she says.

However, a search by MSNBC.com for some hot toys turned up shortages all around.

Of the four sites tested by Prudential Securities, only eToys had a good supply of the popular Bear in the Big Blue House plush dolls. KBKids.com was the only store still stocked with the Harry Potter Trivia Game, and it had a good supply of Hasbro's Poo-Chi electronic dog as well. Amazon had the robotic dog in one color. eToys had the Super Poo-chi dog and a notification that the cat models were "coming soon."

Another hot interactive toy, Mattel's Diva Starz dolls, could be found at Amazon (two of the four different models were unavailable), although eToys was completely sold out. KBKids.com didn't carry the dolls. Walmart.com carried three of the four trendy, "cool talkin'" teen dolls.

None of the four stores had the Barbie Volkswagen Beetle in stock. Despite the toy sellouts, the overall online shopping experience for consumers has improved dramatically, a new study finds.

But one company is offering hope for last-minute shoppers. Online delivery company Kozmo.com announced it will be running its one-hour delivery straight through the holidays -- including Christmas and New Year's days.

"Last holiday season, many online shoppers were disappointed when their gifts didn't arrive on time. Kozmo is the solution for all shoppers, including last-minute shoppers, who will have the satisfaction of knowing their gift will arrive e-mmediately," said Gerry Burdo, president and CEO of Kozmo.com. "And unlike other online retailers, you can even place an order with Kozmo on Christmas Day and it will be delivered right away."

The company, which originally just offered snacks and other sundries, has expanded its selections to include DVDs, CDs, electronics, gifts, and, yes, even some toys.

Topics: Amazon, E-Commerce

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