Online Wins Big In Thanksgiving Stakes - Twice

Online Wins Big In Thanksgiving Stakes

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NEW YORK —

Shoppers came out in force over the Thanksgiving shopping period, but didn’t necessarily leave their homes.

Surveys suggested that free-shipping offers, comparable pricing and the lure of home shopping ate into brick-and-mortar business, culminating in a record $1 billion in total online sales on Cyber Monday.

A report by the National Retail Federation (NRF) pegged total retail sales from Nov. 25-27 at $45 billion, with the average shopper shelling out $365.34 in stores and online, an increase of 6.4 percent over last year.

Traffic was also up as some 212 million shoppers visited stores and websites over the weekend, representing an 8.7 percent increase year over year, the NRF said.

But absent the contribution from e-tail, brick-andmortar sales were less than stellar. According to ShopperTrak, store-based sales were essentially flat on Black Friday, up a negligible 0.3 percent to $10.7 billion across all retail locations. The research firm believes business was impacted by early November promotions, which boosted sales and traffic 6 percent during the first two weeks of the month, and by compelling online offers.

“A percentage of retailers concentrated on pushing folks to their websites with various online-only sales, which most likely influenced Black Friday performance,” said ShopperTrak founder Bill Martin.

Indeed, the number of people who shopped online

Thanksgiving weekend rose a healthy 15.2 percent to 33.6 percent of all shoppers, NRF said, while market research firm ComScore reported a 9 percent increase in online spending on Black Friday, to $886 million, and the billion-dollar bonanza on Cyber Monday.

Even Thanksgiving Day, traditionally a lighter spending window, saw online sales soar 28 percent to $407 million, ComScore said, while a survey by the Consumer Electronics Association (CEA) showed that more than half (53 percent) of consumers who bought electronics on Thanksgiving purchased them online, due to deals that were the same or better than those offered by retail stores.

“Although Black Friday is known for the flurry of activity occurring in brick-and-mortar retail stores, online shopping is increasingly becoming the refuge of those preferring to avoid the crowds and long lines,” noted ComScore chairman Gian Fulgoni.

Steve Baker, industry analysis VP for The NPD Group, said traditional retail tactics like extended holiday- sale periods helped the online channel grow its share of Black Friday shoppers by 44 percent, compared to a 6 percent increase for brick-and-mortar stores. “The trend is clear — attaching retail brick-andmortar shopping patterns to online patterns are proving  to be successful, and vice versa as well,” he wrote in an NPD blog.

Online sales hit their peak on Cyber Monday, soaring 19.4 percent yearover- year and outpacing Black Friday’s 16 percent spike by 31 percent, according to a report by IBM Coremetrics. The average Cyber Monday order was $194.89, up 8.3 percent from last year, and 2.1 percent higher than the average haul on Black Friday, making it the biggest shopping day of the year, the company said.

E-tailers’ own reports bear out the pace of channel growth.

Walmart.com

said traffic increased about 30 percent on Black Friday over last year, and rocketed nearly 50 percent on Thanksgiving Day, while online-only retailer

Buy.com

cited Cyber Monday as its single-best sales day in company history, with sales up 48 percent year-over-year as of 5:00 p.m. PST on Nov. 29. The e-tailer also enjoyed its best Black Friday ever with net sales up 45 percent, driven by a better than 100 percent increase in purchases through third-party sellers.

Online also led the charge for multichannel retailer ShopNBC. Total company sales rose 36 percent on Cyber Monday while online sales surged 59 percent to comprise 56 percent of net revenue, up from 48 percent last year.

Similarly, ShopNBC’s total Black Friday sales rose 12 percent over last year, driven by a 54 percent increase in online sales. E-commerce comprised 51 percent of net sales that day, up from 37 percent last year and 40.5 percent during the third quarter.

AT&T similarly saw record online traffic on Black Friday and Cyber Monday, which contributed to one of the busiest post-Thanksgiving shopping weekends in company history.

Traffic at

att.com

was up 14 percent on Black Friday and more than 22 percent on Cyber Monday, driven by “compelling deals” and shop-at-home convenience. Traffic was also up significantly in the carrier’s brick-and-mortar stores, drawn by device upgrades and U-verse TV sales, the company said.

“More consumers want the convenience of shopping online -- this has been a trend building over the last several years and [was] why we offered such a robust line-up of deals to kick off the holiday season,” said

ATT.com

VP Phil Bienert.

John Squire, chief strategy officer for IBM Coremetrics, concurred. “Consumers appear much more willing to open their wallets and are turning to online stores for the convenience of shopping wherever and whenever they like, but also as their primary source of information about products and inventory levels,” he said.

According to a survey by Shop.org, the online arm of NRF that actually coined the term Cyber Monday, nearly nine out of 10 retailers (88.2 percent) planned special promotions for that day, up from 72.2 percent in 2007. Plans included specific deals (49 percent, up from 43 percent last year), one-day sales (41 percent vs. 33 percent last year), and free shipping on all purchases (21.6 percent vs. 15.7 percent last year).

At

Amazon.com

, Cyber Monday specials included a 47-inch 1080p Vizio LCD-TV for $599, a Panasonic S50 camcorder for $149, a Nokia N8 touchscreen phone for $429, and a TomTom XXL 5-inch widescreen portable GPS navigator for $90, all with free shipping.

At

Walmart.com

, discounts were offered on over 150 select items during a “Cyber Week” sale that ran through Dec. 3. Featured products included a Philips 8GB Vibe MP3 video player for $40, Garmin’s Nuvi 295W 3.5-inch portable GPS for $89, a 24-inch Viore LED-TV for $199, and an Hewlett-Packard Mini 210 netbook PC for $318, all with free shipping.

E-tailers also leveraged social networking sites and mobile shopping apps to provide information about deals and inventory levels. While the percentage of visitors arriving from social networking sites is fairly small (nearly 1 percent), the strategy is gaining momentum, Coremetrics said, with Facebook leading the category.

What’s more, 3.9 percent of Cyber Monday shoppers visited a retailer’s site using a mobile device, the research firm said. Shop.org put the figure even higher at 6.9 percent, nearly double the estimated 4 million who shopped that way last year.

Taken together, the inducements led an estimated 106.9 million Americans to shop on Cyber Monday, Shop.org projected, up from 96.5 million last year. Interim executive director Joan Broughton said the trade group was actually surprised that the catchphrase caught on in such a big way over the past five years. “Today, Cyber Monday has become such a crucial component of the holiday season that many retailers — and shoppers — don’t remember the holidays without it,” she said.

Bernard Luthi, marketing, web and customer service VP at e-tail-only merchant Newegg.com, concurred. “Cyber Monday is a viable, viable day,” he told TWICE, “one of the top two or three days of the year.”

NPD’s Baker regards the increase in online volume as incremental business, rather than siphoning sales from retail stores. “Consumer sales overall and even tech sales specifically, are likely to see an increased splintering of the consumers’ wallet as they become more multi-channel shoppers,” he observed.

But regardless of how and where people shop, most weekend watchers agreed that solid Thanksgiving volume may portend a good holiday season for all retailers.

“The holiday shopping season got off to a strong start this weekend, as consumers, on average, completed nearly twenty percent of their holiday shopping, highlighting the importance of the Thanksgiving Day weekend for retailers, manufacturers and consumers,” said Shawn DuBravac, CEA’s chief economist and director of research.

ShopperTrak’s Martin agreed. “We still saw a record amount of money spent [at brick-and-mortar stores] on Friday, so it’s hard to say Black Friday wasn’t a success.”

Added NRF president/CEO Matthew Shay, “While Black Friday weekend is not always an indicator of holiday season performance, retailers should be encouraged that a focus on value and discretionary gifts has shoppers in the spirit to spend.”

Looking ahead, Shay advised retailers to keep the momentum going through the early weeks of December with “savings and incentives that holiday shoppers simply can’t pass up.”

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