Cyber Monday Is No Longer a One-Day Tradition
Maybe "Cyber Week" would be a better name.
Just as Black Friday spilled over into Thanksgiving night, Cyber Monday has gone from being a one-day event to a tentpole for more than a week's worth of promotions and discounts. Online sales on Thanksgiving, historically not a banner day for e-commerce, jumped 17 percent, according to research conducted by IBM. On Black Friday, online sales grew by 21 percent.
As of noon EST on Cyber Monday, online sales were up 24.1 percent compared to last year, according to data from IBM. In 2011, the early Cyber Monday year-over-year growth was 15 percent. IBM tracks transaction data from 500 U.S. retail websites.
This year's kickoff to the holiday shopping season was intensely competitive, with retailers offering price-matching and pricing merchandise aggressively. Shoppers responded, spending $59.1 billion over Black Friday weekend, according to the National Retail Federation. Research company comScore said online shoppers spent a record $1 billion on Black Friday and predicted that Monday's sales will hit $1.5 billion.
For the past couple of years, stores have pushed their Black Friday openings earlier in a bid to get shoppers off their computers and into stores. With stores opening as early as 8 p.m. on Thanksgiving this year, online retail upped the ante and started promotional blitzes even earlier.
Cyber Monday was conceived in 2005, two years before the iPhone even existed. Today, ubiquity of smartphones and tablets also makes this spillover inevitable, as users comparison-shopped electronically even while in brick-and-mortar stores over the long weekend. And thanks to widespread penetration of residential broadband access, Americans don't have to wait to get back to the office on Monday to have the entire Internet at their fingertips.
"Consumers shopped in store, online and on mobile devices simultaneously to get the best bargains," IBM's report noted.
"[Cyber Monday] continues to be strong, and what's happening is that we're seeing just more shift to the web channel overall even on other days like Black Friday and Thanksgiving," said Forrester Research analyst Sucharita Mulpuru.
Amazon.com is a big likely winner for Cyber Monday sales, said Marshal Cohen, chief retail analyst at the NPD Group. "They're doing a really good job of suggestive selling. They're making the site much more efficient," he said. "You have to basically put them in the forefront."
Analysts had high hopes for big-box stores including Wal-Mart, Target and Best Buy, and said retailers with a strong online counterpart to their physical stores, like J. Crew, Ann Taylor, Apple and Williams-Sonoma, were in a good position to take advantage of Cyber Monday shopping.
In an interview with CNBC Europe, Eric Abensur, group CEO of Venda, said that savvy retailers could avoid the threat of cannibalizing sales by using online and mobile promotions to drive customers to their physical stores, while other analysts said the strong showing over the weekend could be at today's expense.
"Our sense is that while today is still the major day of the cyber period, it may not be off-the-charts historic," said Joe Feldman, a senior analyst at Telsey Advisory Group. Feldman said overall spending is likely to grow over last year, but consumers are spreading out their purchases over a much longer time period than before.
"What we're seeing is the front loading of the holiday business," Cohen said. He said the early promotional hype could backfire if consumers' appetite for spending fades. "They've sort of shot themselves in the foot."
But Andrew Lipsman, vice president of industry analysis at comScore, disagreed with that assessment. "I think it's a misconception that Thanksgiving or Black Friday promotions must pull from Cyber Monday," he said. "They may pull dollars from later in the season or represent incremental spending."