Toy Shortages Send Shoppers Online

Cyber Monday came early as consumers flocked online over the weekend to pay as much as $100 for TMX Elmo on eBay as the season's hottest toys and electronics sold out early on Black Friday.

Mattel, parent company of Fisher-Price, said it has ordered more of the red fabric that makes up the $40 Elmo, added production lines, and is flying the toys into the country from its foreign plants.

Mattel, which sought to capitalize on the 10th anniversary of the original Tickle Me Elmo, generated buzz by word of mouth--and an industry observer estimates that the company put out only enough inventory so far to satisfy a third of consumer demand, ensuring a sense of urgency among parents to get one.

Consumer demand is high not only for Elmo, but also for Nintendo's Wii and Sony's PlayStation 3.

Worldwide, there's a shortage of Sony's much-anticipated PlayStation 3 gaming system, with only 400,000 released to the public in the U.S. A spokesman for Toys 'R Us said all the PlayStation 3 systems sold out before hitting shelves, at a pre-sale on Oct. 29.

Bargain hunters flocked to the Web well ahead of so-called Cyber Monday--what pundits are dubbing the "official" start of the online holiday shopping season.

According to a Shop.org survey conducted over the weekend by BIGresearch, 60.7 million consumers plan to shop online from home or at work today.

"Online retailers are using Cyber Monday to debut holiday merchandise and offer virtual doorbusters," said Scott Silverman, executive director of Shop.org. "On Cyber Monday, consumers will find specials ranging from percentages off entire Web sites to specific savings on big-ticket items."

Some 83 percent of online retailers plan to offer some kind of free shipping promotion during the holiday season, according to the Shop.org/Shopzilla eHoliday Mood Study.

On Friday, Wal-Mart's Web site was disrupted for most of the morning; Disney also had problems handling the online rush, and Amazon.com had brief disruptions a day earlier due to a Thanksgiving Day sale on Microsoft's Xbox 360 video game machines.

The most popular e-commerce site, with 7.5 million unique visitors on Friday, was eBay--which sold 2,537 Elmos at an average price of $70.

Traffic increases do not always translate into immediate sales, as Internet shoppers often browse the Web for deals, but wait until later in December to make a purchase.

Still, overall traffic to more than 120 online retailers tracked by the Nielsen//NetRatings Holiday eShopping Index rose 12 percent on Friday compared to the same day last year. That is a more modest pace than the 29 percent growth in overall traffic to the index from 2004 to 2005, and more in line with the 11 percent growth seen from 2003 to 2004.

Comparison shopping site Shopping.com anticipated a repeat of last year, when Cyber Monday was its busiest day for merchant referrals. Through Black Friday, the company reported that referrals were up 40 percent across the board, with categories such as kids and family up 70 percent.

Still ahead is the second Monday of December, which was the best sales day recorded by online retailers last year.

Forecasts for online holiday sales increases from Jupiter Research and Forrester Research range from 18 to 23 percent. For perspective, total forecast sales of $27 billion to $32 billion represents just 6 to 7 percent of total holiday retail sales--which the NRF projects will be up 5 percent to $457.4 billion.

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