Consumers exceeded expectations this past holiday season by flocking to the Internet to buy gifts. As a result, eMarketer raised its 2006 online holiday sales estimate to $24.8 billion, a 24.6% increase over 2005 sales.



In fact, online holiday sales (November and December) amounted to nearly one-quarter of total 2006 retail e-commerce sales of $108.7 billion, as recently reported by the US Department of Commerce (DoC).

"The big news was that the fortunes of retail stores and retail Web sites diverged this past holiday season," says Jeffery Grau, eMarketer senior analyst and the author of the new US Retail E-Commerce Update. "Consumers shifted their holiday purchases from bricks-and-mortar stores to the Internet at a much higher rate than almost anyone anticipated."



Experienced online buyers not only spent more with Web merchants but also expanded the categories from which they were willing to buy.

"Nothing epitomizes that fact more than the popularity of online jewelry purchases," says Mr. Grau.

According to comScore Networks, online sales of jewelry outpaced all other retail categories during the 2006 holiday season compared with the year before.



"That defies the predictions of Internet analysts who in the early days of e-commerce said that jewelry could never achieve critical sales mass on the Internet," says Mr. Grau. "Meanwhile, consumer electronics gifts were popular online and in stores, providing evidence that the Internet channel has gained mainstream consumer acceptance."

While jewelry was a fast-growing online holiday category, clothing, books, digital media and toys were the most frequently purchased gifts on the Internet during the peak online sales period, according to a survey conducted by BIGresearch on behalf of the National Retail Federation (NRF).