Online Retailers Cashing In as Holiday Spending Soars

Thanks in large measure to the widespread availability of free shipping for Web purchases, online spending has vaulted up 12 percent ahead of the corresponding period last year, according to online metrics firm comScore.

Since the beginning of November, shoppers have spent $17.5 billion at ecommerce sites by comScore's tally, which excludes travel purchases, auction sites and large corporate buys.

More than half of all online purchases so far this holiday season have come with the offer of free shipping.

"Without a doubt, free shipping has become a critical driver of ecommerce purchasing, with the majority of consumers indicating that they will abandon their shopping carts if they get to check-out and find that free shipping is not included," comScore Chairman Gian Fulgoni said in a statement.

"Retailers have increasingly responded to this consumer demand, with market leaders Amazon and Walmart, for example, both offering free shipping on virtually all transactions this season," he added. "Importantly for retailers, transactions with free shipping run an average of 30 percent higher in-basket value than those without, hopefully helping to offset some of the margin compression that can occur with such attractive incentives."

On the week beginning the Sunday after Thanksgiving, comScore reported that 55.1 percent of all online purchases came with free shipping, an increase of 9.6 percentage points over the same period in 2009.

Since the beginning of November, comScore has counted four days when shoppers spent more than $800 million online, including Cyber Monday -- the Monday after Thanksgiving -- when consumers spent $1.028 billion, making it the heaviest spending day on record. On the Tuesday, Wednesday and Thursday of that week, retailers also netted proceeds of more than $800 million, though spending trailed off at the end of the week.

Historically, Cyber Monday has been eclipsed by a handful of days in December as the heaviest single-day spending totals of the season.

"Cyber Monday started the week off with a bang, but online spending growth softened during the latter part of the week and into the weekend," Fulgoni said. "We anticipated that the post-Cyber Monday period would experience a slight hangover after many of the retailers' most aggressive deals and promotions expired, but we can expect to see activity begin to pick up again next week as we get into the middle part of December when online buying typically peaks."

Kenneth Corbin is an associate editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.