Online retailers pulled in two to three times more business this year than last

December 28, 1999
Web posted at: 12:42 p.m. EST (1742 GMT)

SAN FRANCISCO (CNN) -- Despite some holiday snafus, online retailers are getting mostly good reviews from consumers who did their gift buying on the Web.

BizRate.com, an independent ratings service that evaluates online stores using shoppers' feedback, reports a satisfaction level topping 8 on a 10-point scale.

Not bad for an industry that, in some cases:

• Messed up as many as one in four orders.

• Failed to advise customers of delays.

• Sent some parents scurrying for last-minute replacement gifts.

• Left children without gifts on Christmas morning.

RESOURCES Special Report: Online Retailing   MESSAGE BOARD e-Commerce

But online customers are forgiving, says BizRate.com's Paul Bates, because they appreciate three things: the convenience of 24-hour shopping, no crowds and the chance of finding a bargain.

If the customers loved it, think how the online merchants must feel, after pulling in two to three times as much business as last year -- perhaps even more business than they could handle.

"Probably, the numbers (for online sales) came in somewhere between $6 to 7 billion in contrast to last year's roughly $3 billion. That's quite a spike in demand," says Bank of America's Paul Tashjian.

Still, he notes, that's just a fraction of the estimated "$185 billion in sales that were generated at retail stores."

While customers were most satisfied with online purchases of clothing, computers, home and garden items, food and wine, they were less happy with dot-com companies selling CDs, books, and videos.

Customer service seems to be the key to customer loyalty. And while there are many online firms that "haven't done it well ... e-commerce is here to stay," says Miguel Helft of The Industry Standard, an e-commerce trade publication.

While the industry's long-range optimism seems justified, not every dot-com is making a killing.

BizRate.com says there are nearly two million e-tailers on the Net. But the top 10 percent get 90 percent of the business.

Correspondent Don Knapp contributed to this report.

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