Once upon a time, all Amazon did was sell books. They did so at a discount, a vast change from the full-retail pricing of the brick-and-mortar shops like Borders. Amazon was a godsend for people who like to read.

Their dominance led to partnerships with other retailers, in and out of bookselling. Target is still a partner, while Toys ‘R’ Us ended its Amazon relationship on a bitter note.

Count Borders as an ex-partner too, though if they’re unhappy with Amazon for some reason, they haven’t disclosed it. Borders chose to focus on the positive as they stepped back into retailing on the Web.

As Yahoo News noted, Borders executives belief they can offer a compelling experience in the face of Amazon’s dominance. We like competition; consumers end up with better choices when rivals clash.

Unfortunately for Borders, the clash looks one-sided. A quick search for the next James Patterson thriller, Sail, coming out on June 9^th, showed the big difference between Borders and Amazon. While Borders has the book listed at a full $27.99 price tag, Amazon has it for $18.47 with a promise to provide the best possible pre-order price.

Borders, a Magic Shelf isn’t going to overcome a difference of over $11 these days, not with oil traders rolling out prices of $4 per gallon at the pump.

This month, another survey says that price is the most important factor.

In November, WebProNews’s Mike Sachoff covered Nielsen’s survey, which had overwhelmingly high percentages citing the ability to shop any time and the time-saving aspect as their main reasons for shopping online (81% and 77% respectively).

Ease of comparison shopping was cited by 61 percent.

Low prices was their fifth concern, behind ease of finding the items they sought, with just 46 percent naming low prices as their primary reason for shopping online. Just 24 percent cited low shipping costs.

Nielson Online’s Ken Cassar suggested consumer preferences for convenience spiked during the holiday season, as shoppers sought to avoid crowds at brick-and-mortar locations.

These findings are in sharp contrast to market research firm Synovate of Chicago for Guidance, who says America’s uncertain economy is driving an increase in bargain hunting.

Guidance’s poll suggests the opposite of Nielsen’s, as 67 percent chose price as their first or second most important factor in online shopping (43% 1st, and 24% 2nd), and 59 percent (18% and 41%) of respondents chose free shipping as their first or second choice.

By comparison, only small percentages chose convenience factors like speed/efficiency of checkout (8%) or in-store pickup/returns (3.5%).

Also interesting about this survey is that those with higher incomes (above $75,000 annually) favored special promotions or coupons more often than those from lower income brackets.

So which is it? Price or convenience?

I imagine we could hold our own poll and come up with a third set of numbers. But it may pay off if online retailers can focus on a combination of both to maximize sales.  

Online Holiday Spending Tops $18 Billion

Non-travel retail spending online for the period of November 1 through December 7 rose 18 percent compared to the same period in 2006.

Analysis firm comScore also noted that spending on December 6th made it the heaviest online spending day ever.

"It was a terrific kick-start to December, but we expect the upcoming week to be the heaviest online spending week of the holiday season as the procrastinators and late-season deal-seekers come out in earnest," said comScore Chairman Gian Fulgoni.

Those coming out late may follow the example set by searchers through the month of November.

In tech product searches for the month, consumers showed the most interest in the hard to find Nintendo Wii.

Interest in Apple’s iPod media players and Microsoft’s Xbox 360 gaming console followed the Wii. Sony’s PlayStation 2 drew more searches than the newer PlayStation 3, which comScore attributed to bargain hunting by consumers.

"While iPods and iPhones are predictably popular, we’re also seeing that consumers are actively searching for information on GPS products," said Fulgoni. "This is a category that can be expected to grow strongly during the next few years."

All of those items have to get to their destinations somehow, which will keep shipping companies busy through December.

Shipper DHL said they expect a 25 percent hike in their average daily volume compared to the first three quarters of 2007.

It also means putting Santa to work on the forklift. Meeting that demand will require increasing DHL’s daily U.S. truck routes by 25 percent.

The Jolly Old Elf might be a much leaner Santa by the time Christmas Eve arrives.

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SES Chicago returns, and WebProNews is on hand to bring you reports and videos from the Windy City. Enjoy our coverage this week.

Duncan White of Oneupweb told "There’s Still Money on the Table!" session attendees that 20 percent of top retailers have fully optimized their websites. He cited the Internet Retailer Study 2007 and named Best Buy, FTD, and Amazon as ones successfully doing SEO.

"Well optimized sites are using social media," said White. Blogs, podcasts, and video became part of their toolkit as well.

SEMPO president Jeff Pruitt also touted the virtues of social media, and called it "increasingly relevant" to online retailing.

Old media has its relevance as well. "Print and radio are areas where we’re leaving money on the table," Pruitt said.

When diving into new media, like video, Pruitt emphasized the need to have the right tools on hand to measure it. He recommended TubeMogul for tracking videos a site creates and distributes.

"Video is a great opportunity to get your brand out there and extend your message," said Pruitt.

WebProNews Internet reporter/anchor Abby Prince contributed to this report.

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Online retail sales in the United States jumped 23 percent, to US$28.4 billion, during the third quarter of this year compared with the same July-September period in 2006.

The retail surge was led by sales of video games, consoles and accessories, which showed a year-to-year increase of 199 percent.

And the not-so-good news (emphasis mine):

“Online retail spending continues to grow at rates in excess of 20 percent year-over-year, which suggests that the market is still far from maturity,” comScore Chairman Gian Fulgoni said. “Even online travel commerce, which is a more developed market, continues to experience double-digit gains.”

Of course, a lack a maturity in an industry doesn’t mean that it’s more liable to talk back, flounce off to sulk and slam the door behind it. Despite these negative connotations, the immaturity of an industry may only indicate that we can expect a lot more growth spurts from it.

But you know if online retail slowed even the slightest bit—even if its growth were only in the single digits—naysayers would come out of the woodwork from every quadrant to tell us that they knew eCommerce was a fad.

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The game isn’t over when it comes to online retail sales. Measurement firm comScore noted the rise in year over year sales for the third quarter, including a massive boost in gaming retail.

The video games, consoles & accessories category measured by comScore virtually tripled in US sales year over year. Microsoft debuted its Halo 3 title for the Xbox 360 game console during the period, a move that helped boost their profit to a 23 percent gain over the same period last year.

Consumer electronics, like flat screens and high-definition TVs, grew 58 percent. Toys have been the subject of recalls due to paint containing lead, as used by Asian manufacturers. Despite those highly publicized recalls, the comScore toys and hobbies category grew by 57 percent.

Demand could be challenged by yet another recall, announced by Mattel, due to lead paint on their Go Diego Go toys.

That bodes well for retailers who may have justifiably feared a slowdown in toy sales as the all-important fourth quarter holiday season begins in earnest. Retailers should keep on track with their marketing promotions, rather than taking current demand for granted, as there are four more weeks before shopping demand starts its post-Thanksgiving push.

Including travel, online retail hit $48.6 billion, 18 percent over the same quarter in 2006. Travel retail accounted for $20.1 billion in spending in the third quarter.

Internet retailers plan to drive their holiday sales primarily through search marketing, even though they are noticing that costs are rising and ROI is dropping. They also plan to increase free shipping offers and promote percent-off discounts.

None of this is a surprise. Internet retail has grown at 20% for the past two years after the huge explosion of growth early in the decade. As retailers find themselves fighting for their share of the stagnant (not increasing) pool of internet shoppers, they are becoming more desperate. It is no surprise that price wars continue to dominate the landscape.

My guess is that there are going to be a lot of blood baths in the coming holiday season as retailers accept a negative ROI under the misguided notion that their customers will stay loyal for future purchases. My advice is this—there is no better time than now to focus on building a business model that does not force you to have to compete on price.

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JupiterResearch predicts that a record 126 million people, a 6 percent increase over last year, will make online purchases this holiday season.

Because of the record number of people expected to order online, retailers are boosting their efforts to attract customers with a number of tactics including search marketing.

"Over half of online retailers say they will increase efforts with search engines, despite rising costs and some reports of declining ROI. Shoppers can also expect to take advantage of more free shipping offers this year," said Patti Freeman Evans, JupiterResearch Senior Analyst and lead author of the report.

"This enticement will also translate to online retailers with brick-and-mortar stores who will likely to beef up their use of percent-off discounts."

Computer and consumer electronics sellers are expected to aggressively use percent-off discounts further driving an already popular category.

Only using such incentives may not be enough to attract consumer traffic, especially among those who do not regularly shop online during the rest of the year.

Consumers who are undecided if they will shop online are expected to stick to traditional sources to find gifts this year as they gravitate to store visits and retailer Web sites more than places like wish lists and social sites, which means that retailers will have to focus on a number of shopping tendencies to be successful.

"Online retailers have an opportunity to gain market this year because of the resilience of online shoppers, in spite of a relatively soft off-line holiday season," said David Schatsky, President of JupiterResearch. "Aggressive use of cross channel messaging and promotions will be key to capturing undecided customers."

WebProNews has been covering the Shop.org Summit, taking place in Las Vegas. You can catch our conference interviews at WebProNews videos right now.

Hoffman spoke at the Shop.org Annual Summit 2007, and asserted that we are now moving into Web 3.0 (from an era generally defined as Web 2.0).  One of the more interesting things she believes will come along with this transition is the concept of “ABBA” – atoms to bits, bits to atoms – as seen in 3D printing.

Consumer-generated media is also likely to become more common, and Hoffman believes this third-party content could have a great effect on reputations and sales.  At the same time, she warned people to stay away from anything identifiable as spam, and to keep an eye out for “brandjacking.”

It might be possible, at least to some degree, to stay ahead of that threat by offering increased amounts of personalization and customization.  These trends are on the rise, anyway, and are a good way for companies to differentiate themselves.

But as all this transpires, Hoffman cautioned listeners to keep an eye out for something very simple: the best channel to reach consumers.

WebProNews anchor Kara Ratliff contributed to this story.

ShopLocal Introduces Online Retail Index

The Index, updated monthly, is based on an average of 20 million monthly consumer visits to online store promotions that are featured on the sites of major U.S. retailers. The retail segments covered include computers, consumer electronics, office supplies, home improvement, department stores, mass merchants, grocery, drug and specialty stores.

ShopLocal found a strong link between shopper’s pre-purchase activity and in-store purchases.  A July 2007 ShopLocal survey of 23,600 shoppers online found that 65 percent made an in-store purchase within a week after visiting a site and another 23 percent within three weeks.

"ShopLocal has a unique vantage point for observing how the Internet is being used to influence in-store shopping," said Vikram Sharma, CEO of ShopLocal.

"The ShopLocal Index reflects that an increasing number of shoppers are using the Internet across a wide range of categories to decide what products to buy and where to buy them in their local stores.

The Internet’s influence on multi-channel shopping is growing, according to Forrester Research. The company projects that a quarter of all retail sales are impacted by the Web.

"Shoppers are increasingly turning to the Internet as a research tool prior to purchasing in-store," said Greg Sterling, founder of Sterling Intelligence. "The ShopLocal Index is a helpful new barometer and scorecard for online-influenced offline shopping."