Booming Business At The E-Mall

By CBSNews.com staff CBSNews.com staff

December 28, 1998 / 5:04 PM EST / CBS

For the first time ever, the success of this holiday retail season cannot be counted in crowds because the cash came in . . . online.

CBS News Correspondent Diana Olick reports that a study released Monday shows holiday sales on the Internet surged 230 percent -- nearly tripling last year's figures.

"I think that consumers are seeing familiar brand names and more products to choose from and they're therefore going to the web for their holiday shopping," said Internet analyst Nicole Vanderbilt.

It was so much so, says Vanderbilt, that even the biggest online merchants were crazed and crippled by the demand.

"Some retailers were having trouble even keeping their sites up, there was just such great traffic into their storefronts that was hard for consumers either to get to their site or to complete an order," said Vanderbilt.

That's why some sites, like Amazon.com are already apologizing with gift certificates, trying to keep the new customers clicking into the new year.

As for the old-fashioned, and still by far most popular, way of doing it, malls and discount stores had to offer big markdowns before Christmas to get the big crowds and are now slashing prices even more to move the merchandise.

"The department stores are the ones that are really struggling the most, they've lost a lot of credibility with shoppers because their merchandise isn't that unique anymore and they offer sales all the time," said Marketing Consultant Wendy Liebmann.