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Online Sales Fall For First Time in E-Commerce History

Online retail sales fell in the third quarter for the first time in e-commerce history, and holiday sales are expected to be unimpressive, according to a new study out by Forrester Research.

"The sagging economy finally took its toll on consumer spending in Q3, punctuated by a weak back-to-school season," says Carrie Johnson, an analyst at Forrester. "We calculated Q3 online sales at $17 billion, compared with 2002's consecutive $20 billion quarters."

The online retail numbers would have looked much worse, though, if not for Amazon.com and eBay posting 'blockbuster' sales, adds Johnson. Online giant eBay logged in $3.77 billion in gross merchandise sales, 60% over the same period last year. And Amazon's sales hit $851 million, 33% over sales in the same period in 2001.

Amazon.com is expected to keep those numbers up, going into the fourth quarter and the holiday shopping season. Forrester analysts predict that the launch of Amazon's new apparel tab will lure shoppers online, while the usually big demand for toys and electronic gift cards will push sales.

Businesses in the e-commerce arena will have to pull out all the stops to bring in decent sales numbers this coming season, but it can be done, according to Johnson.

"While 4 million more households will shop online this holiday season compared with 2001, the overall spending per person will be less than last year -- $433 versus $463 -- because they feel more adversely affected by the economy," says Johnson. "We're forecasting that during the 27-day shopping period between Thanksgiving and Christmas, online retail will hit $9.5 billion."