The ability of e-tailers to grow and to reach new consumers was evident in the most recent holiday period. According to Jupiter Communications, online retail spending during November and December 2004 reached $22.1 billion or 22% more than in the 2003 holiday period.

An influx of new online buyers drove the gain, Jupiter said, with 17.7 million consumers making their first-ever holiday purchase online in 2004.

The number shouldn't be surprising. Holidays are a time when consumers, whether because they can't find an item or because they are willing to do just about anything to get their holiday shopping done, are willing to try new things. "The holidays present a great opportunity for retailers to acquire new customers for the long term," said Patti Freeman Evans, retail analyst at Jupiter Research. "Not only were millions of people shopping online for the first time, but three-quarters of consumers bought from a site they had never purchased from before."

McKinsey & Co. estimated that holiday shoppers spent approximately $14.5 billion on goods at e-tailing sites, up 29% over the 2003 season.