Amazon says 2008 holiday season was 'best ever'

Online retailer Amazon.com Inc. called this holiday season its "best ever," saying Friday that it saw a 17 percent increase in orders on its busiest day - a rare piece of good news in a season that has been far from merry for most retailers, including online businesses.

Amazon customers ordered more than 6.3 million items on Dec. 15, compared with roughly 5.4 million on its peak day last year, the company said. It shipped more than 5.6 million products on its best day, a 44 percent rise over 2007, when it shipped about 3.9 million on its busiest day.

The company did not provide dollar figures and wouldn't say whether the average value of orders had changed, and the jumps it reported Friday are in line with increases Amazon has seen since it started releasing the figures in 2002.

Amazon's best-sellers included the Nintendo Wii game console, Samsung's 52-inch LCD HDTV and Apple Inc.'s iPod touch.

Analysts agreed Amazon's report was good news for the online shopping giant, but they were divided over whether the results indicate strength in online commerce in general.

Forrester Research analyst Sucharita Mulpuru said Amazon's experience shows the current economy is favoring discount retailers, both online and offline.

"The Amazon story doesn't surprise me because Amazon has always traditionally been a leader on price, and they're one of the first places consumers go when they're looking for things online," Mulpuru said. "In many ways they're like the Wal-Mart of the online world."

Wal-Mart is one of very few traditional retailers where revenue has risen this holiday season over last.

Holiday sales typically account for 30 percent to 50 percent of a retailer's annual total, but rising unemployment, home foreclosures, the stock market decline and other economic worries led many shoppers to slash their shopping budgets this year.

SpendingPulse - a division of MasterCard Advisors - said its preliminary data show that online sales fell 2.3 percent compared with the 2007 holiday season, while retail sales overall fell 5.5 percent to 8 percent, including sales of cars and gasoline. The decline was 2 percent to 4 percent when auto and gas sales are excluded.

Online shopping may have gotten a boost from winter storms during last two weeks before Christmas, which made travel to brick-and-mortar stores more difficult.

And, although Amazon's orders rose, the company didn't say whether orders were, on average, worth more or less than last year. Spokeswoman Sally Fouts said the company would release revenue results in its fourth-quarter earnings report, due in about a month.

But she said this was Amazon's "best season ever."

Orders to Amazon on the peak day of its holiday season have jumped in the double-digit percentage range for at least the past 5 years, according to data released by the Seattle, Wash.-based company since 2002. Last year, Amazon's orders spiked 35 percent to 5.4 million at their peak, from 4 million in 2006.

Stifel Nicolaus & Co. analyst Scott Devitt said online retailers' sales tend to grow much faster than those of brick-and-mortar retailers, but he said that difference narrowed this year. That's in part because shoppers tend to go to stores for necessities and online for discretionary purchases, he said. And in an economic downturn, consumers focus on their most-needed purchases and cut back on more frivolous items.

Devitt said Amazon benefited from a vast infrastructure that allows for faster, more reliable shipping than most of its online peers offer. He called Amazon's announcement an "extremely positive data point" and said the company is "uniquely positioned to do well in an environment like this."

That environment has left many retailers in a tough position. NPD Group senior retail analyst Marshal Cohen said they will be forced in coming weeks to take still more drastic measures to drive sales and raise whatever cash flow they can.

Amazon's shares gained 34 cents to close Friday at $51.78, a 0.7 percent rise.