Amazon.Com - The First E-holiday Shopping Season, 1998

THE FIRST E-HOLIDAY SHOPPING SEASON (1998)

The fourth quarter of 1998 was the first holiday shopping season in the United States that had substantial retail sales over the Internet. The Boston Consulting Group estimated that American consumers spent about $4 billion buying goods and services online during the fourth quarter of 1998, and nearly $10 billion throughout the year. While that amounted to less than one percent of all U.S. retail sales, e-commerce sales more than tripled from 1997. The same report estimated that more than 8 million U.S. households made an online purchase during 1998.

In the fourth quarter of 1998 America Online (AOL) was the Internet's most popular shopping mall, but Amazon.com was the number one e-tailer. It sold a variety of books, CDs, videos, and gifts, including a selection of 185 toys. It also spent heavily on marketing and advertising—$29 on average to acquire a new customer, which is one reason the company had yet to turn a profit.