Retailers and consumers have wised up to each other’s habits: Offer more sales and consumer will shop more. But if stores offer longer sales, it also may spread out how, where and when consumers are spending their money.
That may be the future of Cyber Monday and Black Friday, which are slowly turning a retail holiday into a retail holiday week and month. Black Friday sales were down, taking in $50.9 billion over the holiday weekend, an 11 percent decrease from 2013’s $57.4 billion. That shouldn’t be particularly shocking given the shift in foot traffic from brick-and-mortar stores to online shoppers. Initial numbers showed retailers saw an e-commerce sales increase from last year of 15.6 percent on Dec. 1. But early figures also varied depending on who you asked. IBM Digital Analytics Benchmark showed an 8 percent growth in Cyber Monday sales, Reuters reported.
Cyber Monday sales figures reported by the Associated Press Tuesday evening (Dec. 2) showed a 17 percent jump from last year to nearly $2.04 billion, according to comScore research, which “represents the heaviest online spending day in history and the first to surpass $2 billion in sales,” the firm said.
The terms Cyber Week and Cyber Month are getting used more frequently for retailers who are trying to compete in the fiercely competitive online space. IBM reported that Cyber Monday sales jumped 20.6 percent from the year prior. Some shoppers plan for days like Black Friday and Cyber Monday, but others have caught on to the fact that more retailers are offering sales throughout the holiday shopping season.
“Cyber Monday offers aren’t super compelling, but don’t need to be,” Forrester analyst Sucharita Mulpuru told the Associated Press.”It’s been the biggest shopping day of the year for the last few years, so they know that people are going to come.”
But that’s certainly not the only opinion in the industry.
“Any notion that Cyber Monday is declining in importance is really unfounded, as it continues to post new historical highs and reflects the ongoing strength of online this holiday season,” comScore Chairman Emeritus Gian Fulgoni said in the Associated Press article. “This may be part of a larger shift toward online buying as mobile phones spur the practice known as showrooming. …The data we’re seeing suggest it may be more a change in shopping behavior than a lack of consumer demand.”
Cyber Monday follows a weekend that saw a 5.3 percent dip in shippers and 11 percent less spending, according to National Retail Federation estimates. But the allure of Cyber Monday is still there, even if it’s being spread out over more than a day. Many retailers, like Gap and Banana Republic, offered 40- and 50 percent off deals, Amazon offered 45 percent off some TVs and it marked down its Amazon Fire TV video streaming box by $30. Walmart also had its highest Cyber Monday ever, and best online day ever, which was “driven by a surge in mobile traffic and sales of electronics,” according to the Wall Street Journal.
“Walmart said customers viewed more than 1.5 billion pages on its site between Thanksgiving and Cyber Monday with a higher traffic surge in the evening compared with previous years. Walmart added that about 70 percent of its online traffic in the five-day period came from mobile,” WSJ reported. “Walmart also touted growth in its same-day pickup service, which saw a 70 percent increase in orders over last year on demand for a holiday Barbie doll and Xbox 360 bundle.”
Walmart and other major retailers have reported seeing a decrease in foot traffic, leading executives to rethink digital strategies and analyze investments in their brick-and-mortar presence. Walmart specifically has said its goal is to grow its global e-commerce presence. Walmart’s third-quarter earnings resulted in the world’s largest retailer posting its first sales growth for the first time in nearly two years, led in large part by growth in its global e-commerce market. Walmart has also staged its prices against Amazon.
“Walmart’s prices on small appliances were lower than Amazon’s on most of Thursday and on Friday, according to price-tracking firm 360pi. And Walmart’s prices on videogames were lower than Amazon’s every day last week except for Thursday and part of Friday,” WSJ reported.
So what were some of the hits and misses of the retail holiday? Retail Drive broke a few down:
While Cyber Monday sales growth was up, the rate is slowing. Having sales spread out throughout the week or month could have much to do with this trend. Black Friday trends were similar.
“The declining pace of growth reflects an earlier start to the year-end shopping season, with Amazon.com Inc. and other online retailers offering online deals before Black Friday, when stores traditionally began offering holiday discounts,” Bloomberg reported. “With people shopping online more frequently, e-commerce on Saturday and Sunday was up 17 percent compared with the same weekend in 2013, according to IBM, which began measuring pre-Cyber Monday sales last year in response to shoppers’ changing habits.”
Soren Mills, chief marketing officer at Newegg Inc., an online electronics retailer, told Bloomberg that people are “realizing it’s a season of shopping” that is no longer limited to one or two days. “People are turning it from a day-long occasion to a monthlong occasion,” he said. That’s contributing to the Cyber Monday slowdown, Bloomberg said.
“It’s not like the day isn’t growing, it’s just that the additional growth is being spread more evenly on other days,” Jay Henderson, strategy program director at IBM, told Bloomberg. Sucharita Mulpuru, an analyst at Forrester said Cyber Monday is a chance for retailers to “stem some of the bleeding,” adding that longer shopping sales are making the concept of Black Friday and Cyber Monday irrelevant.
Bloomberg also reported that eBay sales rose 19 percent on Cyber Monday, while Amazon rose 12 percent, according to ChannelAdvisor Corp. Amazon also pushed sales earlier to boost its sales growth over the weekend, which saw a 46 percent increase on Saturday and 24 percent on Sunday, according to ChannelAdvisor Corp.
“Consumers are definitely shopping earlier,” Scot Wingo, ChannelAdvisor’s CEO told Bloomberg. “Thanksgiving eats into Black Friday, and Saturday and Sunday are eating into Cyber Monday.”