A. It’s a new phenomenon called “Cyber Monday”. On November 28, millions of Americans returned to work after the Thanksgiving holiday and fired up their office computers to take advantage of high-speed Internet links and continue the arduous task of hunting for Christmas presents. Visits to some retail websites more than doubled, and Visa reported that online spending by its cardholders grew by 26% compared with the same day a year ago. Despite concerns about a fall in consumer confidence putting the brake on store sales, online purchases are soaring in most countries, Something else is happening, too. Increasingly, the websites run by conventional retailers - once considered dinosaurs of the bricks-and-mortar age - are growing the fastest. Indeed, on Thanksgiving Day itself, the number of visitors to Wal-Mart’s website exceeded those visiting Amazon - the first time that has ever happened, says Hitwise, which monitors Internet usage.

B. Online sales in America (excluding travel) are expected to grow to more than $19 billion in the crucial two months running up to Christmas - 24% more than the same period last year - according to comScore Networks, a research firm. Online sales of toys, computer games, clothing, and jewellery are all more than 30% higher. In many countries, the websites run by eBay and Amazon get the most visitors. Both are considered “pure Internet plays”, since they have no physical shops. Their business models have changed markedly, and they now resemble online versions of vast department stores, where thousands of big and small third-party merchants also offer their wares. During Thanksgiving in 2004, Amazon for the first time sold more consumer electronics than it sold books.

C. Amazon was the company that proved online retailing could be a huge business - and it still leads the pack. Things are changing quickly. The online rise of mighty Wal-Mart, the world’s biggest retailer, is being closely followed by its chief supermarket rival, Target, which now operates the fourth most popular retail website in America. In Britain, Argos, a catalogue merchant, is the third most popular retail site, followed by Tesco, the country’s biggest supermarket chain. Europeans are surfing the web in record numbers and almost half now visit retail websites, especially those of traditional merchants. According to Nielsen//NetRatings, the leading retail websites in Europe include Germany’s Tchibo, a diversified chain; OTTO, a German mail-order specialist; and Fnac, a French high-street favourite.

D. Far from wrecking retailers’ businesses, the web plays to their strengths. Shopping comparison sites, including America’s Shopzilla and Ciao in Europe, are among the fastest growing destinations on the web. These sites allow users to compare products, read reviews - and most important of all - see who is offering the lowest prices. They make money from advertising or charging retailers when users click on a link to the retailers’ website. With huge economies of scale, it is hardly surprising that giants such as Wal-Mart often emerge as the vendor offering the cheapest prices. Besides attracting an online purchase, shopping comparison searches can also be used by ordinary retailers as a relatively cheap way to advertise and attract consumers to their physical stores.

E. The traditional retailers are finding many other advantages in expanding their stores online. One is that in cyberspace, even the biggest super-centre is unconstrained by planning laws or dogged by protests, as Wal-Mart often is when it tries to expand offline. Both Wal-Mart and Target also use the web to test the market for certain \ products before they send them to their stores. Conventional shopkeepers might be late coming to the Internet, but they now realise that they can offer more to their customers online, and that the technology required to do so is relatively easy to use, says Michael Silverstein of the Boston Consulting Group. “Retailers are starting to recognise that their most profitable customers ... find the convenience of an online offering complementary to an in-store experience,” he says. As examples of successful exponents of this in America, Mr. Silverstein points to Neiman Marcus, which has taken a lead in online top-end fashion, Victoria’s Secret in lingerie, and Circuit City in consumer electronics.

F. Circuit City was a pioneer of the “pick-up in-store” option, which is proving increasingly popular with Internet shoppers. Around half the customers buying goods online from Circuit City collect their purchases at a shop. For this holiday season, the company is offering what it calls a “24/24 Pick-up Guarantee”: if goods ordered online or over the telephone are not available for collection at a local store within 24 minutes of purchase, the customer can claim a $24 gift voucher. Apart from instant consumer gratification, why would someone want the convenience of buying online only to trek to a store to take delivery? There are, it appears, many reasons. Some people want to examine items before they accept them; some want to save on delivery costs; others want to avoid hanging around for the delivery man to call. For many, the chief reason is that they trust a big retailing brand with a local store - not least because they will know where goods can be returned if there is a problem. With more than 3,700 stores in America alone, this hands Wal-Mart another big advantage. It is developing services that link the web with its stores, such as e-mailing digital pictures and picking up the prints.

G. Does this mean retailing giants will come to dominate the web just as they do the high street? Some might carve out large chunks of cyberspace. Tesco, for instance, has a huge 30% share of the British grocery market. Online it is even more popular: Nielsen//NetRatings says almost 70% of online shoppers plan to buy groceries this Christmas from tesco.com. Even the big traditional retailers still face competition online. For instance, Wal-Mart may have more than five times the annual sales of Target, but Target’s website is growing faster and, according to some analysts, the average value of an online sale at Target is roughly three times more than one made online at Wal-Mart. This is one reason why Wal-Mart is now offering more upmarket goods on its website, including diamond rings. So, should Amazon have stuck to books? Jeff Bezos, its founder and chief executive, does not think so and likes to plug his site, with its growing army of other traders, as offering “earth’s biggest selection”. Nevertheless, he is spreading his bets. These days, Amazon also sells its e-commerce experience, helping to run the websites of big, traditional retailers such as Target and Britain’s Marks & Spencer.