With today’s economy, it is amazing to find out that online shopping was at its highest this holiday season. Maybe the convenience of e-commerce has finally made an impression on holiday shoppers.

According to ComScore, online spending rose to $27 billion as compared to the $25 billion spent last year. That’s a 5% increase between November 1^st and December 24^th. Not only did online spending rise, but customer satisfaction rose as well. A survey conducted by ForeSeeindicated that overall satisfaction of customers rose to 79%, which is the highest it has been since 2001. The most satisfying e-commerce site in the survey was Amazon (for the second year in a row) with a score of 87 out of 100. Other top runners included Netflix, Apple, and Newegg.com. ForeSee also reported the most improved online shopping sites, which included Macy’s, Gap, and HSN.

The New York Times gives a few pointers on how to improve an e-commerce site. They say the most important quality in a shopping website is guaranteeing a smooth and speedy checkout for the customer. Anyone who has shopped online will agree that if a certain website is not loading properly or being very slow during the checkout process, it makes you a little nervous. You are trusting this site with your credit card number and you definitely don’t want to have to hit the refresh button and end up with two of the same order. Simply lowering prices won’t increase sales if your site needs to be refreshed every two minutes.

Personally, this online shopping increase doesn’t surprise me. Even though the economy has struggled this year, e-commerce sites provide convenience and allow a shopper to avoid the crowds at the mall. The Internet is being integrated into more and more aspects of our lives, shopping is only one of these aspects.

Blockbuster is rolling out a gem of a new service:  Digital downloads of movies… available only in-store.  Sweet.

Between Netflix’s delivery-to-your-door model and the shrinking window between a movie’s theatrical release and its availability for cheap purchase in DVD format… Blockbuster has been taking hit after hit the last few years.  And that’s before all the digital download services cropped up at Netflix, iTunes, Amazon, & XBox Live.  Those services let you zap your favorite new movie directly to your PC with the click of a button.

So naturally Blockbuster wants to keep up, right?  So they’re launching they’re own digital download service.  Great, right?  WRONG !

The only people who will be able to use the digital download service from Blockbuster will be the people standing in their physical stores.  Because Blockbuster’s digital download service is an in-store kiosk.

Yup.  They are that stupid.

They think that you’re going to put your flash drive in your pocket, and drive down to their store, plug it in the machine, pay for a movie, wait for the download, then drive home and watch it.

From the article:

“The latest idea from Blockbuster can best be described as “Netflix meets YouTube, without the convenience.” That’s basically the pitch Blockbuster Chairman and CEO James Keyes made at his first annual shareholders meeting on Wednesday when he unveiled an in-store kiosk he hopes consumers will use to download movies.”

I would think this was hilarious if it wasn’t so insultingly backward in its conception.  Consumers will pay for convenience. That is proven.  I would rather pay twice as much through Netflix or Amazon (and get my movies to my home, from my home, on demand) than get in my car and drive to your physical store to tap my toes while your stupid kiosk downloads my movie.  And for the record, it’s pretty cheap to download a digital copy of even a new movie.  Most movie downloads on iTunes, for example, are $9.99 or so.

Blockbuster’s new service is basically the equivalent of Coke creating a new kind of vending machine… that allows you to put in your dollar… but instead of receiving in return a 20oz. bottle of Coke,  you get a coupon that says “take this coupon to the nearest grocery or convenience store to redeem for a refreshing bottle of Coke.”

It’s like the library announcing that checked out books can no longer be taken out of the building.

I can only conclude that the executives at Blockbuster are a cave-dwelling lot.  Can you think of a Fortune 500 company with less of a handle on where their industry is heading?  Because I can’t.  It’s seriously one of the stupidest ideas I’ve heard in years.

Listen, I get that they’re trying to drive traffic to and through their physical stores to try and sell more product (and pay their rent).  But seriously… you’re supposed to take what your competitors are doing and improve on it (or at least leave it the same)… not make it worse.  A roving balloon-animal magician would be a bigger draw and would probably cost less too.

Microsoft will pay you to use their Live Search.  Well… sort of.

Today Microsoft unveiled a new incentive to use their Live Search for your online shopping search needs:  cash back.

The big M will pay you cash back from purchases you make after searching for the products on their search engine.  So… you want a pair of shoes, you search for shoes at Live Search, click through to a product you find in the listings, and make a purchase… then you’ll get cash back.

From the article:

Products found during a search eligible for a rebate are denoted with a gold coin icon with a U.S. dollar sign in the center. The rebate is based on a percentage of the purchase price and is determined by the advertiser.

So it’s the advertiser paying the cash back, not Microsoft.  And looks like the amount you get back will vary from product to product and advertiser to advertiser.

But it’s still an interesting idea.  What Microsoft has done, really, is turn themselves into one huge affiliate network.  They don’t lose any money out of pocket for the rebates, and the system will theoretically bring them more search traffic.  Win win for Gates and Co.

Some other things to be aware of:

Shoppers must set up a Microsoft cashback account, where the rebate money is held. When the amount reaches $5, Microsoft will either mail a check or transfer the money to a PayPal account or bank account.

So, you have to sign up for an account… no biggie, I guess.  Other than that… you just shop online as usual, only using Microsoft as your shopping search portal.  It’s all going to hinge on whether or not people can find what they’re looking for with Live Search.

There may be other engines out there that handle shopping queries better–I really don’t know.  Of course, if none of the products I want to buy are being offered as part of the CashBack program by advertisers, then it won’t do me any good.

Hmmm, I wonder what happens if I search for operating systems like Vista… will Microsoft be a partner advertiser in their own cash back scheme?

Interesting concept here–definitely a move to try and grab some of Google’s traffic.  We’ll keep an eye on it and let you know how it performs.

Papa Johns announced recently that they have made over $1 Billion from online pizza sales since they introduced the ability to order a pizza via the Internet.

I can just see John from those Papa Johns commercials, doing his best Dr. Evil impression:  “One… Billion… Dollars.”

That is a heck of a lot of pizza, too.  If you figure $12 bucks a pie, that works out to about 83 Million pizzas.

Now, it’s probably not going to be easy for you to start a pizza website and make that kind of cash.  For starters, you’d need a network of brick-and-mortar pizza shops across the US to be able to fill the online orders… and Papa Johns had that built in before they started.

But man, who knew that you could make that kind of money from a pizza website?

They’re on a torrid pace, too, and will make their next $1 Billion in half the time it took to make their first.  From the article:

“It took us seven years to reach our first billion in online sales, and at our current pace and growth rate it will take us less than three years to hit our next billion,” said Jim Ensign, vice president of marketing communications at Papa John’s.

It would be interesting to see how much of this online revenue is new, as opposed to coming from customers who were already buying pizza in the traditional method. I imagine there’s more new business there than you might think, simply because they’ve made the ordering process so convenient.

Almost all the major pizza chains have online ordering capabilities now, and most even let you order via text message… making pizza an impulse-buy item more and more everyday.  Pretty soon I expect to be able to order a pie by merely thinking about a warm, delicious pizza.  Until then… online or text ordering is the fastest method available.