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Squeezing Presidents On the Internet

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Consumers are scouring for bargains on the Internet, spending less per order than last year. Isn’t that what the Internet is for?

    Internet cheapskates are out in force this holiday season. They may be spending less on each order than they did last year, but together they’re coughing up more dough and using the Internet to stretch their dollars, according to research released this week.

    Online sales totaled $8.3 billion during the past five weeks, up 43 percent from 2001, market researcher BizRate.com reported. The data suggest that Internet retailers will be ringing out the year with relief, if not good cheer. Like offline stores, Web merchants rely on the last quarter of the year for much of their income.

    “This means Internet retail sales have nearly doubled over the past two years at a time when offline retailing has been almost flat,” said Chuck Davis, chief executive of BizRate.

    ….Free shipping is the big lure again — even more so than last year. Some 41 percent of Internet purchasers told BizRate that their orders have been influenced by which merchants waive delivery fees, up from 33 percent last year. BizRate’s comparison-shopping site listed 152 merchants with free shipping yesterday, up 26 percent from last year.

    “Retailers in a tight economy are bumping into each other trying to win the consumer’s business,” Davis said. “So it’s not just ‘My free shipping is better than yours,’ but ‘Mine is faster, too.’ ”

    ….Bear in mind that most big offline retailers eke out profits, while a majority of Internet-only retailers don’t. And despite the heady growth rate for Web merchants, online sales represent a fraction of overall retail sales, at less than 2 percent.

    But if it can keep up annual sales growth of 20 to 35 percent for a few more years, Internet retailing appears destined to become profitable for at least some survivors. [Washington Post]

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