The Thanksgiving holiday on the last Thursday in November traditionally kicks off the Christmas shopping season in the United States. In New York, the annual Macy's Thanksgiving Day parade concludes with Santa Claus ringing his bell which signals the start of the shopping spree.

The Friday after Thanksgiving has long been one of the busiest shopping days of the year. It is known as Black Friday as it is the day that the balance sheets of many retailers move from red to black.

This year, not only do retailers in the physical world have sales to look forward to, so do e-tailers - electronic retail sites - on the Internet.

Online retailers got a high level boost on Thanksgiving Saturday when President Clinton, in his weekly radio address, said he planned to do some gift shopping on the Internet this season. "About four million families will buy some of their gifts online for the first time this holiday season," Mr Clinton said. "I intend to join them."

The number of online retail sites has exploded in the US in the past few months. Radio and television advertisements, almost without exception, mention dot.com companies and all eyes were on these e-tailers as the holiday shopping frenzy began.

With a buoyant economy, consumers have plenty of cash and the question was would they spend these dollars online? Early indications after Thanksgiving seem to indicate that this was indeed the case. For example, Yahoo! said that the volume of transactions processed on its shopping section on Friday, November 26th, rose 400 per cent compared to last year.

Estimates of holiday purchase volumes on the Internet, from Thanksgiving to New Year's Day, range from $4 billion (€4 billion) from Forrester Research to $12 billion from Ernst & Young. In its "Holiday Shopping Guide", Forrester Research said the 8.6 million households that shop online this holiday season would buy everything from books and compact discs to researched big-purchase items like computers and furniture. Some, it predicted, would even buy their holiday meals through the Internet.

In a breakdown, Forrester estimated that researched goods would comprise 55 per cent of holiday spending or $2.2 billion; convenience goods would comprise 38 per cent of holiday spending or $1.5 billion; and replenishment goods would contribute to 7 per cent of holiday spending or $297 million.

Most of the purchases would be made by experienced online shoppers (72 per cent), while those who held out last year but have decided to shop online this year would make up about 25 per cent of the shoppers. First-time buyers would comprise the rest (3 per cent).

To encourage first-time shoppers in particular, some companies, including Visa USA, have devised digital wallets that shoppers can use to securely store their payment and shipping information. Others have had to institute contingency plans for customer service and fulfilment, in case their networks become overloaded.

Many online retailers have not only increased server capacity, but they have streamlined fulfilment processes and customer service functions to handle the holiday rush.

Already, however, some Internet retailers, like Toys 'R' Us, have had problems on their sites. On Thanksgiving Friday, Kbkids.com, a partnership of KB Toys and Brainplay.com, had to turn away some online shoppers because it was overloaded for parts of the day. Both eToys and Amazon.com said they had run out of some Pokemon toys.

The No. 1 online store, as it has been for the past four years, is Amazon.com. Analysts predict Amazon to post fourth-quarter sales of $450 million to $600 million this year.

Last Christmas, Amazon.com only sold books, music and videos online. Since then, Amazon has more than doubled its staff, to 5,000, and quadrupled the computing power that runs its website. So far this season, Amazon's sales have nearly tripled and the site now offers toys, electronics, tools and building supplies.

Like eBay.com, it also runs auctions. In anticipation of sales, the company has installed hundreds of tables at its five automated warehouses, each equipped with rolls of wrapping paper, piles of boxes and miles of red satin ribbon.

According to Jupiter Communications, a research firm in New York, the top Internet retailers can each expect to process 58,000 orders each day. Survey results from Shop.org, the trade association of online retailers, and the Boston Consulting Group, forecast that revenues for retailers online would reach $9 billion for the November 1st to the December 31st holiday period. It tracked sales on the Internet for the third quarter of 1999, which showed a growth rate of 160 per cent over the same period last year. "1998 was the year that online retailing moved from an interesting consumer experiment to an accepted retail alternative," said Donna Iucolano, chairman of Shop.org's committee on Internet Shopping Research. "Retailers expect higher sales, but they also know that they must meet or exceed higher customer expectations."

The crux for many of these retailers will be to survive the rush. The key to successful e-tailing will be how online customers have rated their shopping experience. Rather than just making it a once-off, "give it a try" experience, factors such as convenience, free shipping, gift-wrapping and on-time delivery will ensure that people return as repeat customers throughout the year.