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Cyber Monday sales have been slipping
Nov 28, 2010 (Star Tribune - McClatchy-Tribune Information Services via COMTEX) --
This year might mark the beginning of the end for Cyber Monday -- what marketers have long tried to make the Black Friday of online shopping -- even as online purchases continue to surge.
Online holiday shopping revenue is projected to rise 11 percent to a record $32.4 billion this year, according to Virginia e-commerce measurement company ComScore. That's more than four times the increase that's forecast for brick and mortar stores and almost three times last year's 4 percent increase in online sales.
But Cyber Monday, the Monday after Thanksgiving, may lose its significance in this year's scrambled Internet shopping calendar.
Online retailers, worried about the limited amount of money consumers may spend, have been offering online deals for weeks. Meanwhile some big retailers, led by Wal-Mart, have expanded the online shopping season in the other direction by extending free shipping closer to Christmas. Historically free shipping offers ended in the first two weeks of December. Wal-Mart extended its offer for more than month, ending Dec. 20.
"Now that things are on sale every day, Cyber Monday will not have as much impact as it did in the past," said retail consultant Stan Pohmer of Minnetonka.
That's true for Melissa Kjolsing, 26, of Minnetonka, who plans to do two-thirds of her holiday shopping online, much of it over the Thanksgiving weekend.
"I've definitely shifted more to online shopping, because if you know what you're looking for it's so much easier than going out in the sleet and snow," she said. In addition, the early arrival of online deals makes Kjolsing more inclined to shop now rather than later.
"The deals and free shipping are available now," she said. "People see an opportunity to get their shopping done and kind of feel at ease instead of rushing to shop at the end of the season."
In the past, Cyber Monday's impact was largely the result of marketing. The phrase Cyber Monday was coined in 2005 by the online firm Shop.org, and embraced by holiday advertisers anxious to have a name that would stick in people's minds. It grew from the trend online retailers had noticed in previous years of consumers returning to work following the Thanksgiving weekend and using the faster high-speed Internet service there to shop online.
But it was never the biggest online shopping day, as some proponents claimed. The increasing availability of broadband networks at home has made the point somewhat moot. Plus, many employers now ban shopping sites from work computers.
Self-fulfilling prophecy?
Still, retailers have used the now household name to create enough of an event that shoppers do actually come.
By last year Cyber Monday had become the second-largest online shopping day of the season, just behind Tuesday, Dec. 15, according to ComScore.
Online deals promised to be everywhere over the Thanksgiving weekend. Macy's planned to offer a sterling silver set of diamond jewelry, including a pendant, earrings and bracelet, for $99. Staples was planning to take up to 50 percent off some digital cameras and GPS systems. J.C. Penney planned to offer 65 percent off women's coats. Walmart.com said it would offer discounts of up to 40 percent on almost 150 items, or three times the number of deals it provided last year.
Online shopping, while growing, is still expected to account for only about 7 percent of total consumer purchases this holiday season. So while brick-and-mortar holiday spending is projected to increase only about 2 percent this year, it still represents the bulk of shopping dollars.
But online merchants worried about the recession have responded by trying to capture more holiday dollars. They began the holiday hot-deals season in early October this year instead of after Thanksgiving. A survey by Shop.org and BIGresearch showed that nearly 10 percent of online retailers began holiday marketing the week of Oct. 5 or earlier, and about 29 percent began the week of Nov. 2.
That is born of necessity, Pohmer noted.
"People are sticking to their budgets this year, and there's not as much impulse purchasing as there used to be," Pohmer said. "If an online retailer can get those people early, while they're still spending, the merchant will be in good shape. But if an online store holds its best deals until the week before Christmas, consumers might not have any money left to spend."
The still-unanswered question: Will online consumers shop early because deals are being offered, or late because free shipping is available?
Pohmer, for one, doesn't think free shipping will skew holiday sales toward the latter part of the holiday season.
"If a consumer sees the best price or best value early in the season, he or she will jump on it," Pohmer predicted. "Because that particular deal may not be offered again."
Steve Alexander --612-673-4553
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