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Mixed blessings for the etailers

December 26, 2007 9:24pm
by Richard Waters

Kitchenaid_stand_mixer_2  During their most important sales period of the year, ecommerce companies like Amazon and eBay rely disproportionately on the latest must-have gadget, movie or game.

As John Donahoe, head of eBay’s marketplace division, explained at the start of this holiday shopping season: "When they’re new, we sell a lot on eBay and the average selling prices are huge." Last year the Wii had that new-scarce-and-expensive mix, the year before it was the Xbox 360. Elmo has also leant a hand.

So while activity on the ecommerce sites this year has apparently been running high (this is Amazon’s characteristically vaguely worded statement today) the lack of a new knock-out product could be telling. As Donahoe summed it up:

This year, interestingly, there have been no toys or consumer electronics launched in the fourth quarter that have created that effect. We knew that in the summer. We knew the iPod launched this summer was the last thing that was going to create that kind of scarce mentality.

Since he spoke, the Wii has once again been drawing the crowds. Will that be enough, in the absence of new blockbusters, to save Christmas for the etailers? According to Amazon, big sellers alongside the Wii have included Garmin navigation devices and KitchenAid food mixers. Falling prices help to account for the popularity of the last two of these. In the absence of revenue numbers it’s too soon to say how strong a season it turned out to be, though Wall Street, which today pushed Amazon’s shares back towards their heady 12-month high, clearly wants to believe the best.

December 26, 2007 9:24pm in Internet | Comment

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