Online Holiday Shopping Surges 15%

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Online holiday shopping roared ahead in 2010, as consumers spent 15% more than they did in the previous year. The growth was also fueled by consumers shopping using mobile phones in a big way for the first time.

MasterCard Advisors SpendingPulse said online retailers reported online sales of $36.4 billion between Oct. 31 and Dec. 23 versus the $31.5 billion that was reported in the same period last year. SpendingPulse, which measures various payment activities including online, cash, and check, said that apparel sales showed a big jump. Online apparel purchases hit 18.9% of total clothing sales this year, a 25.7% gain over last year's figures.

"This is the season of the sweater," SpendingPulse's VP for research and analysis Michael McNamara, told reporters. "What is driving this is that apparel sales online are doing well in general, represented by a shift from brick-and-mortar stores. The weather has helped, too."

Online retailer Amazon said its current Kindle model is the best-selling product in its history. Amazon bombarded its e-mailing lists with promotional offers, including free shipping, to the point that many were annoyed by the steady Amazon sales drumbeat.

In the end, everybody got into the act, from department stores and other large retailers, to traditional online shopping sites like Amazon and eBay. An Amazon mobile phone shopping app that allows shoppers to scan bar codes for pricing data helped consumers become more comfortable with ordering online with their cell phones. eBay's acquisition of app developer Critical Path Software helped the shopping and auction company attract more mobile phone users this year.

In recent years, consumers have used their mobile phones to find store locations and check pricing of items, but that has proved to be a double-edged sword for some large retailers, which are finding that some online shopping services are sending shoppers to discount sites where they can purchase items for less online than in their bricks-and-mortar stores.