business

The retail bright spot this holiday season may be online.

Cyber Monday gave retailers another excuse to offer consumers discounts, and many shoppers bit, pushing up online sales 16 percent from a year ago, according to online marketing firm Coremetrics. The firm collects data from 500 retailers, including Petco Animal Supplies Inc., Bath & Body Works and Office Depot Inc.

The gains came atop a strong weekend for online sales. Discounts spurred an 11 percent jump in online sales on Black Friday and a 10 percent gain on Thanksgiving, according to research firm comScore. The big shopping days stood out in a month where online sales were up an average of 3 percent.

But even with a few days of blockbuster online shopping -- driven by bargains that were both more widespread and earlier than usual -- holiday sales overall are hardly a huge success.

ShopperTrak, a research firm that tracks more than 50,000 outlets, said Friday's sales at brick and mortar stores rose 0.5 percent from last year. The National Retail Federation trade group is sticking with its forecast that all holiday sales will decline 1 percent from last year.

Online sales represent such a small percentage of retail sales -- estimated between 4 and 7 percent -- that overall holiday sales won't be greatly affected by an up or down move in e-commerce.

Still, for online shopping "this is a very encouraging start," said comScore Chairman Gian Fulgoni. "While this acceleration in spending suggests the online holiday season may be shaping up slightly more optimistically than anticipated, it may also reflect the heavy discounting and creative promotions being put forth by retailers." He noted many were using Facebook and Twitter to spread word of their deals.

But, he said, the real test for online retail lies in the weeks ahead.

Big retailers appear to be doing fine. Amazon, Wal-Mart, Apple, Target and Best Buy websites reported big gains in Friday shopping traffic, though they didn't disclose sales, comScore said. Wal-Mart and Amazon have been waging an online price war to increase their slices of the market.

But smaller retailers are more worried about how big total online revenue will be, because this year's holiday sales predictions have been all over the map.

Predicting higher sales: Forrester Research of Cambridge, Mass., forecasts an 8 percent increase from 2008, to $44.7 billion.

"We look at retailer data, which we think gives a better picture of what is being spent than consumer surveys do," said Forrester analyst Sucharita Mulpuru. "There's quite a bit of upward momentum from the retailer side. We also have consumer data that is more pessimistic, but people never think they will spend as much as they do."

Predicting lower sales: The Nielsen Co. of New York says surveys show 42 percent of consumers will spend less on all types of shopping than last year, and only 4 percent will spend more.

"While the economy appears to be improving at a snail's pace, it's apparent that many consumers intend to spend less and save more this holiday season," said Ken Cassar, Nielsen vice president of industry insights. "Of the money that consumers plan to spend this holiday season, a smaller percentage will be spent online."

In the middle: comScore of Reston, Va., predicts slight online sales growth.

"The average dollars spent per online buyer will be down substantially, but there will be a significant increase in the number of buyers," said Andrew Lipsman, comScore director of industry analysis. "So it looks like marginally positive e-commerce growth this holiday, mainly because the comparisons are being made to a weak holiday last year."

Last year, online holiday sales fell 3 percent, comScore reported. And during the first three quarters of this year they've been trending flat to slightly down. But in the first 27 days of November, online sales were up 3 percent from last year, to $10.57 billion, comScore said.

Who is right this season won't be known until closer to Christmas. Analysts agree the peak shopping day online is in mid-December, which typically coincides with two harsh realities of the online world: free shipping usually ends (on the theory that last-minute shoppers will be willing to pay), and orders need to be placed if gifts are to arrive by Christmas.

For Web retailers, free shipping is both a help and a hindrance. In the first quarter of 2008, 31 percent of e-commerce transactions had free shipping, Lipsman said. By the third quarter of 2009, that had increased to 42 percent.

"Consumers expect free shipping," Lipsman said. "So it becomes the cost of making an online sale."

Associated Press and Bloomberg News contributed to this story.

Steve Alexander • 612-673-4553