Last January, we re-connected with Hilary Billings [2] (keep scrolling down!), a customer experience guru who had migrated from Pottery Barn to Red Envelope [3], the tony, high-touch Web-based gift shop. Billings expressed her concern that as the company grew, its ability to offer such appealing elements as hand-tied bows would be compromised. So it was with some sadness that we saw the New York Times story [4], "RedEnvelope, a Web Retailer, is too popular for its own good," about the company's trouble fulfilling holiday orders.

That was the bad news. The good news is that online sales [5] for the holidays are predicted to top $65 billion this year, a 24% increase over 2003.

Kelly Mooney [6], whose company, Ten/Resource [7], has tracked holiday sales at 40 leading Web sites for the past 7 years, said customers, this year, had greater product selection, enhanced functionality, and increased flexibility when it came time to buy. But the experience was not without its bumps and bruises.

Ten/Resource has published its high points and low marks for the season -- and it's willing to name names. Their report [8] is worth a look. We won't reveal all the findings, but let's just say that Red Envelope was hardly alone.