Cyber Monday, the online retailer's Black Friday, will see the highest level of spending for this post-Thanksgiving shopping day of any year to date; high interest in e-retail popularity will continue year 'round.
Posted Nov 27, 2006
Are you doing holiday shopping on company time today? Your CEO might not be happy to hear it, but you are certainly not alone. The Monday following Thanksgiving, dubbed Cyber Monday by the National Retail Federation, represents one of the biggest online shopping days of the year. The Web's answer to Black Friday occurs when people take time off for the holiday, then return to the office on Monday, heavily trafficking e-commerce sites. Online retailers have taken notice, latching on to the Monday trend with many offering free shipping or special discounts to further increase sales. Consumers are expected to spend a staggering $599 million in this 24-hour period, up 24 percent from last year. However, with online spending increasing everywhere at a rapid rate, is Cyber Monday merely marketing lingo or the real thing?
"It's looking like a good holiday season," says Stuart Larkins, vice president of search for Performics, a provider of search engine marketing. According to the National Retail Federation (NRF), 61 million people are expected to search for gifts online today, with 83 percent of e-commerce sites offering these go-getters some sort of holiday shipping promotion. ComScore Networks, a company that tracks Internet spending, predicts that this behavior will result in a total spend of $599 million today, an increase of 24 percent from 2005.
Although Cyber Monday kicks off the holiday online shopping season, these numbers may be more indicative of a growing trend in online versus in-store shopping, rather than a yearly, day-long fad. Even on Black Friday this year, a day that conjures images of giant lines of freezing door busters, many more consumers opted to shop--more comfortably--at home. Online spending on the 24th increased 42 percent from 2005. With more than half of households now equipped with broadband access, shopping online has become easier, more attractive, and more popular.
Sucharita Mulpuru, a senior analyst at Forrester Research, says of Cyber Monday, "It's a busy shopping day, but so are many days between now and Christmas." She adds that the day is becoming "less and less valuable, because people shop online every day now." Performics finds that although Cyber Monday does result in a spike in sales, it is actually the following Monday or the Monday after that which boasts the highest numbers.
To take proper advantage of this shift in spending, e-tailers must be prepared for a boom not only the Monday following Thanksgiving, but for the days and weeks that follow as well. Forrester predicts that overall online spending this holiday season will be 23 percent higher this year, totaling $27 billion. Mulpuru advises retailers to increase server capacity, optimize their sites, and to make sure that they have enough bandwidth to manage high traffic flow.
Larkins recommends that marketers do not concentrate their sales offerings on one day, but extend promotions throughout the season. "You've got people constantly researching and looking. You don't want to place your ad on Monday and not have that offer on Tuesday, Wednesday, and Thursday."
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