Online sales during the extended holiday weekend proved stronger than anticipated for e-retailers, and some experts are now predicting online sales will grow ahead of previous estimates.
Online sales totals for the Thursday through Monday period are still being tabulated, but web measurement firm comScore Inc. estimates U.S. online sales were $3.5 billion from Monday, Nov. 22 through Sunday, Nov. 28, compared with $3.2 billion during the same period last year, an increase of 9.4%. More than $1.05 billion of those sales occurred on Thanksgiving Day and the day after Thanksgiving, often called Black Friday, up from $913 million last year, or 15%. Thanksgiving Day sales tallied $407 million, up 28% from a year ago, and Black Friday sales tallied $648 million, up 9%.
Dollar estimates are still being tallied for Monday’s sales, but a report released today by Coremetrics, a web analytics technology unit of IBM Corp., says online sales on Monday, commonly referred to as Cyber Monday, increased 19.9% over the same Monday last year, and 31.1% over Black Friday this year. “Cyber Monday has pulled away from Black Friday as one of the biggest days for online retail,” says John Squire, chief strategy officer for Coremetrics.
In addition, the report notes that Cyber Monday’s online average order value increased 2.1% over Black Friday, to $194.89 from $190.80, and 8.3% over Cyber Monday 2009, when the average ticket was $180.03.
Industry analysts say the strong sales indicate consumer confidence is coming back. The National Retail Federation, a trade group, reported on Sunday that 212 million people shopped online and offline in the first days of the shopping season, up nearly 9% from 195 million a year ago. The rise in online sales over the Thanksgiving weekend and into Cyber Monday can be attributed partly to looser purse strings among shoppers but also to their interest in finding deals on the Internet, says Sucharita Mulpuru, vice president and principal analyst for retail e-business at Forrester Research Inc. “This is all an indication that consumer confidence is much stronger and that consumers are always eager to look for some great deals,” she says.
The weekend’s success also is causing industry experts and e-retailers to rethink their holiday sales expectations. “The holiday weekend blew our expectations away,” says Scot Wingo, CEO of ChannelAdvisor, of his e-retailer clients’ sales performance over the five-day period. He says for the Thursday through Monday period same-store sales were up an average of 26%. Wingo says ChannelAdvisor had projected sales would be up 20%. Cyber Monday delivered the best year-over-year performance among ChannelAdvisor clients, up 36% and totaling $28.7 million in gross merchandise value.
E-retailer clients managed by Mercent saw gross merchandise value climb 32% over the five-day period, which CEO Eric Best says is modestly stronger growth than the company had expected. He says he is optimistic that e-retailers can sustain a higher level of sales through December. “A strong Black Friday and Cyber Monday does not mean you are going to have a weak December. Retailers are better prepared and consumers are showing a propensity to buy discretionary and luxury items. I think this shows a holiday that is moving ahead of forecast,” he says. “I don’t think a revised estimate of 20% growth is unrealistic or an unachievable number for the entire season.”
Black Friday was the biggest day for sales growth over the weekend for Channel Intelligence e-retailer clients. Same-store sales were up 30% on Friday and up 20% on Monday, says Alan Fulmer, co-founder and executive vice president of Channel Intelligence. He projects his e-retailer clients will see an 18% increase in same-store sales for the entire holiday season.
E-retailers selling through Amazon’s marketplace saw some of the largest year-over year gains, say Best and Wingo. Amazon marketplace sales grew 105% on Friday for Mercent clients. Amazon marketplace sales grew 98% on Monday for ChannelAdvisor retailers. “Amazon has become synonymous with online holiday shopping and has great brand mind share among shoppers. Amazon continues to demonstrate that it can deliver on its promises,” Best says.
Consumers certainly found some big offers this weekend, but data from personalization firm MyBuys say discounts weren’t as deep as last year. The 200 retailers it tracks reduced their discount level by an average of 10% on Black Friday, the firm says, and the total revenue from products sold at list price was up 19%. MyBuys also estimated online Black Friday sales were up 16% from a year ago.
Meanwhile, EBags.com’s revenue increased 63% over the five-day period between Thanksgiving and Monday, with sales peaking yesterday. While the retailer’s average order value remained virtually identical to a year ago, the site’s traffic rose 26% and the conversion rate was significantly higher than a year ago, says Peter Cobb, co-founder and senior vice president at eBags.com.
On the Friday after Thanksgiving, eBags, No. 117 in the Internet Retailer Top 500 Guide, unveiled discounts of 25% in several categories along with free shipping for orders over $100. The result was a 76% increase in sales compared with the same day a year ago, marking the biggest sales day in the retailer’s history. Or, it was the largest day in its history until Monday, when sales increased 54.3% over last Cyber Monday, which, before Friday, was previously the retailer’s biggest sales day in history.
Although marketplace sales make up a smaller portion of the retailer’s overall sales, sales on eBay.com Inc., Amazon.com and Walmart.com skyrocketed with year-over-year increases of 168%, 100% and 102%, respectively. Cobb attributes the eBay growth, in part, to the retailer having a daily deal on the eBay home page on both Friday and Saturday. That led to 500% year-over-year growth on Friday and 367% growth on Saturday.
“Internet shoppers have become uber-sophisticated,” says Cobb. “And they make it a game to find the lowest price. We understand that and know we have to be the lowest price because it’s critical to gaining market share.”
Buy.com also had its biggest sales day in the company’s history on Monday, says Jeff Wisot, Buy.com’s vice president of marketing. The retailer’s sales increased 48%, driven in large part by growth in the retailer’s marketplace. Throughout the five-day window from Thanksgiving to Monday, marketplace sales eclipsed Buy.com direct sales.
“That’s extremely exciting,” says Wisot. “Not only because that growth is boosting our overall numbers, but also because it will allow us to help others when we begin offering our white-label marketplace to other retailers.” Buy.com told Internet Retailer in July that it plans to allow retailers to sell all or some of Buy.com marketplace’s SKUs on their own sites before the end of the year.
Wisot says the growth is spurred by Rakuten-influenced changes, such as its 45-day return policy and its super points rewards program. Rakuten bought Buy.com earlier this year for $250 million.
Even more crucial have been changes that have enabled the retailer to more effectively spend marketing dollars. Using technology that analyzes consumer holiday shopping behavior throughout every hour of the day, for instance, has allowed Buy.com to bid more on keywords when consumers are more likely to buy, says Wisot.
“By being smarter about how we operate, we actually decreased our marketing spend for the weekend,” says Wisot.
Monday also proved to be the biggest sale day for GSI Commerce e-retail clients. The provider of e-commerce technology and services says sales peaked later in the evening as shoppers raced the midnight deadline to catch sale prices. 967 orders were place in its peak minute at 10:28 p.m. Eastern time, up 23% from the peak Cyber Monday minute last year.
An influx of traffic led to a sales boom for Shoebuy.com over the five-day window, says James Keller, the company’s chief marketing officer. On Friday alone, the site attracted more than 500,000 unique visitors, a 100% jump from 250,000 a year ago. And on Monday traffic rose 75% to more than 700,000 unique visitors from 400,000 a year ago. The result was strong growth in each of the retailer’s key benchmarks, such as frequency of purchases and average order value, he says.
The retailer’s growth was largely driven by its efforts to increase selection on the site. The retailer added 100 new brands for the holidays, along with new categories such as wallets and sunglasses.
By giving consumers more of what they’re looking for, they’re returning to the site, he says. In fact, 65% of the retailer’s sales over the five days were repeat customers. That trend is what is leading Keller to predict the retailer will comfortably have its 11th straight year of double-digit growth.
Online sales also got a boost from consumers shopping on their mobile phones. The Coremetrics report shows 3.9% of traffic to retail web sites came from mobile device on Cyber Monday and 5.6% on Black Friday, compared with a miniscule range of 0.1% to 0.2% a year ago, says Squire, of Coremetrics. He attributes the increase largely to the widespread availability of faster access to the Internet via mobile devices and the fact that many mobile shoppers can now access commerce sites optimized for mobile phones.
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