cyber shopping

Retailers have high hopes for 'Cyber Monday'
MARINA STRAUSS

Globe and Mail Update

November 25, 2007 at 10:29 PM EST

It's called Cyber Monday, the day after the U.S. Thanksgiving long weekend when retailers kick off the virtual holiday shopping period by luring consumers with bargains.

One of the busiest days of the year for online purchases, Cyber Monday is expected to attract 72 million shoppers at home or at work, up from 60.7 million last year, according to a weekend survey done for Shop.org, a network of virtual retailers. Their online purchases are expected to generate an estimated $700-million (U.S.) in online retail sales, a 21-per-cent increase over the $608-million of sales last year on the Monday after Thanksgiving.

This follows Friday's rise of more than 8 per cent in traditional retail sales.

But Cyber Monday shopping also means that employers could lose a total of $488-million in productivity as employees purchase books, toys, video games and other items while at work, according to the job placement firm Challenger Gray & Christmas Inc. of Chicago.

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The estimate is based on 68.6 million U.S. employees, or about half of the work force, spending an average of 12 minutes using their Internet connections at work to surf the Web to buy holiday gifts.

"Online retailers consider Cyber Monday a virtual 'Black Friday' and will be offering promotions that will be tough to beat later in the holiday season," said Scott Silverman, executive director of Shop.org.

Retailers now compare Cyber Monday to Black Friday, the Friday after Thanksgiving and the first official day of the U.S. holiday shopping season.

Dozens of online retailers now actively trumpet the notion of Cyber Monday.

The name was coined in 2005 by Shop.org after e-merchants reported a surge of Internet shopping that day. Many offer online deals, one-day-only discounts and free shipping.

On Black Friday, traditional retailers enjoyed a strong start to the season, with sales rising 8.3 per cent to an estimated $10.3-billion, compared with the same day a year ago, according to the National Retail Sales Estimate from ShopperTrak, a customer traffic counter.

Black Friday sales typically account for between 4.5 and 5 per cent of all holiday sales, ShopperTrak said.

The sales spike was evidence that customers are willing to spend despite mounting worries about a slumping housing market, a credit crunch and soaring fuel prices.

Experts say those concerns still may dampen the season over all.

"Although retailers need to remain cautious, the Black Friday outpouring should have them breathing a sigh of relief, and they will be paying close attention to see if consumers continue this strong shopping pace throughout the holiday season," said Bill Martin, ShopperTrak's co-founder.

Black Friday also saw an increase in traffic to Internet retail sites such as eBay Inc. and subsidiaries Shopping.com and Paypal.

Shopping.com said its traffic to merchants increased 61 per cent from last year.

Another research firm, ComScore Networks, also reported that online sales got off to a good start.

The firm, which tracks Internet spending, said yesterday that online sales, excluding travel, auctions and corporate purchases, rose 22 per cent to $531-million on the day after Thanksgiving, compared with the same day a year ago. ComScore expected online sales Monday to exceed $700-million.

An increase in online shopping has somewhat defused the seasonal predictions based on Black Friday turnout to stores. The convenience of online shopping has resulted in a boost in shopping on Thanksgiving Day itself.

Shoppers are browsing and researching more on Friday, but buying more on the Monday following Thanksgiving, eBay said in a statement.

Challenger Gray, the job placement consulting firm, said that while some productivity will be lost on Cyber Monday, employers should not worry because, realistically, workers are not paid by the minute and are not expected to be constantly productive.

"Unless online shopping causes deadlines to be missed or Internet performance to suffer, companies should not attempt to crack down on the practice," said John Challenger, chief executive officer of Challenger Gray.

"Doing so could negatively affect morale and loyalty, which ultimately will have a greater impact on the bottom line than a few minutes of cyber shopping." The National Retail Foundation wants you to believe in Cyber Monday, a mythical day when office workers across the land let all calls go straight to voice mail to better focus on shopping online.
HOLIDAY E-COMMERCE: SALES IN BILLIONS
$12.3 2003

$15.7 2004

$19.6 2005

$24.6 2006

$29.5 2007 projection

Source: comScore Networks


Of course, these are the same NRF folks that want you and your credit card to believe in Santa Claus and the Easter Bunny. The truth is that the online holiday season is well under way. Last year, the first spike in holiday shopping traffic came on Black Friday � the Friday after Thanksgiving � as online retailers offered specials to lure customers away from crowded malls.

Yes, office workers will sneak to Amazon and eBay and to other sites tomorrow when the boss isn't looking, and there will be a bump over Friday's traffic figures. But chances are that so-called Cyber Monday won't even rank among the top 10 online days of the season. Last year, it was the 12th-busiest.

The real peak in cyber shopping won't come until the first two weeks of December, when keyboard shoppers realize that shipping rates are about to go up. Last year, the week of Dec. 3 was the biggest week overall for online shopping, while Dec. 12, a Tuesday, was the biggest single day.

"There's not much to the Cyber Monday thing," said San Diego State University marketing professor Mickey Belch. "It was created just to pump up Internet shopping."



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The funny thing is that online retailers don't need the made-for-TV Cyber Monday pseudo event, Belch and others say. In what is expected to be a mostly tepid retail season, online shopping should see strong double-digit growth.
Belch said that the growing popularity of holiday shopping online stems, in part, from growing dissatisfaction with the malls at this time of the year. An article in Marketing Daily, an online publication, found that 133 million Americans will have hit the stores by the end of this weekend, and a strong majority will be unhappy by the time they're done, Belch said.

Forrester Research, which predicts a 21 percent increase to $33 billion in online holiday shopping, says consumers are looking online for cost savings and less stress. In a Forrester survey, 61 percent of shoppers said they are more likely to shop at online stores offering free shipping and less likely to pay for extras such as gift wrap.

Another reason for the continued growth of online retail is that the novelty has worn off. In previous years, consumers tested the waters with small purchases. As they've become more familiar, they are wading in, said Andrew Lipsman, senior analyst with Internet research firm comScore Networks.

ComScore is forecasting $29.5 billion in online sales this holiday season, a 20 percent increase over 2006.

"The biggest factor is increased tenure online," Lipsman said. "After people try out online shopping and have a good experience, they come back. Experienced online shoppers buy more items, shop more frequently and buy more expensive items."