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A revolution grows up

Is the revolution over already?

I'm talking about the Internet retailing revolution, which over the past six years has changed the way much of America shops.

The short answer is no; there's still retailing growth and innovation all over the Web. But there's also no missing the clear signs of a maturing phenomenon.

Forrester Research and Juniper Research, two leading technology research firms, both forecast that Internet retail sales will increase about 20 percent this Christmas season. That kind of gain, considerably higher than any forecast for the broad retail sector, still represents decelerating growth, compared to the 31 percent climb recorded for Internet sales during the same period last year. It would be the slowest percentage increase since holiday online shopping has been tracked.

Two comparisons: All retail sales using credit cards on Friday and Saturday increased 6.1 percent, according to Visa USA, while data from ShopperTrak, which follows sales results from 30,000 outlets, painted a mixed retail picture for the post-Thanksgiving Day rush. It said business started strong, up 10.8 percent compared with year-ago figures on Friday, but came in much weaker on Saturday, to reduce the two-day improvement to 3.5 percent.

Traffic at Internet retailing sites (measuring the number of individual online shoppers) was up 11 percent on Friday, compared with activity on the same day last year, according to Nielsen/NetRatings data. Actual sales numbers were not available.

That's the early snapshot for the holiday season. Online retailing is growing faster than anything else, but it can't keep up with its own history, in percentage terms. The bigger Internet retailing gets, the more it resembles the entire shopping world.

Now take a closer look at those online traffic figures. The most popular site by far, eBay Inc., attracted 5.4 million visitors Friday, followed by Amazon.com, at 2.6 million. Together, they towered over all the other sites tracked by Nielsen/NetRatings.

But who was number three and gaining fast? Wal-Mart Stores, with 1.4 million. It was the leader among five traditional bricks-and-mortar retailers who claimed places on the top 10 list. Sears, ranked ninth, may be using the Internet to pull off one of the most complex blended Web-and-store strategies anywhere.

Those traditional retailers are piling onto the Internet later, but in a big way. EBay recorded the biggest crowd Thursday, but it was the same number of visitors the site attracted the day after Thanksgiving last year. Amazon's number was up 13 percent; Wal-Mart attracted 61 percent more customers.

"I think we've all intuitively believed the multichannel guys were the ones who would win in the long run," says Ken Cassar, at Nielsen/NetRatings. "With the exception of eBay and Amazon, that's the case."

Of course, customers aren't using all online sites for the same thing. But the biggest bricks-and-mortar retailers with Internet ambitions, including Target Corp., Best Buy Inc. and Toys "R" Us Inc., are making progress integrating their online and off-line operations.

"They're getting their multichannel acts together," says Forrester analyst Carrie Johnson. "It doesn't sound ground-breaking, but it's new, and it takes a lot of coordination."

Multichannel retailing can mean something as basic as driving Internet traffic to stores. More importantly down the Christmas-season stretch, a handful of big electronics retailers and Sears make it possible for customers to buy on the Internet and pick up products in their stores. That's not a brand new concept, but it's tricky to pull off, and big traditional retailers are getting better at it.

There are some pure Internet sites, touting huge business growth, especially Yahoo! Shopping and Overstock.com. But this will be remembered as the Christmas season when a revolution morphed into the Internet retailing evolution.

Steven Syre is a Globe columnist. He can be reached at syre@globe.com. 

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