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Online retailers see surge on 'Cyber Monday'

Online merchants finally got some relief with the unofficial start of the holiday shopping season, spurred by a bevy of deals and free shipping offers.
/ Source: The Associated Press

Like their counterparts at the malls, online merchants finally got some relief with the unofficial start of the holiday shopping season, spurred by a bevy of deals and free shipping offers. But the stronger-than-expected bump in online sales Monday couldn’t cancel out a lackluster November.

Meanwhile, ShopperTrak RCT Corp., a research company that tracks retail sales for more than 50,000 outlets, released more data Wednesday showing that the better-than-expected sales boost on Friday, the traditional opening for the holiday shopping season at stores, fizzled quickly during the rest of the weekend — resulting in a mixed start to the season. And figures released by SpendingPulse, a data service provided by MasterCard Advisors that estimates U.S. retail sales across all payment forms including cash and check, pointed to more signs of a bleak November for the nation’s stores — despite Friday’s surge. The grim numbers from SpendingPulse augured poorly for the monthly sales figures retailers were set to report Thursday.

Internet research company comScore Inc. said Wednesday that online sales spiked 15 percent to $846 million on “Cyber Monday,” which was named by the National Retail Federation in 2005 to describe the surge in online spending when customers returned to work after Thanksgiving and shopped from their desks.

Nielsen Online, a service of the Nielsen Co., reported a 10 percent increase in Web traffic to online shopping sites on “Cyber Monday,” fueled by beauty items, toys and video games. Ken Cassar, vice president of industry insights for Nielsen Online, said in a statement that he expects Monday, Dec. 15 to be the peak day for online shopping traffic.

According to comScore, the four-day period from Friday through Monday saw e-commerce spending jump 13 percent as both weekend days and Monday all posted double-digit gains.

From Nov. 1 through Dec. 1, however, online spending fell 2 percent. Still, comScore Chairman Gian Fulgoni described the big boost as “extremely encouraging.” ComScore forecasts that online spending for the holidays will be unchanged from last year, when sales rose 19 percent from 2006.

“This is an extremely encouraging development for retailers, and we can but hope that their aggressive discounting has still left room for profits,” Fulgoni said in a statement.

Gene Munster, senior research analyst at PiperJaffray, wrote in a report released Wednesday that the robust traffic and sales reported by Nielsen and comScore were a “positive” for online retailer, which is considered a barometer of online spending. Munster has been expecting comScore to report a smaller 5 percent sales increase on Cyber Monday.

Still, he added that while “Cyber Monday appears to have been a positive for (Amazon),” it doesn’t change his belief that “the consumer will be weak in the December quarter.”

ShopperTrak said Wednesday that total retail sales from Friday through Sunday rose a modest 0.9 percent from the three-day holiday weekend a year ago. Sales increased 3 percent on Friday, but fell 0.8 percent on Saturday and a steeper 2.3 percent on Sunday. Furthermore, foot traffic plummeted more than 19 percent from the same holiday period a year ago.

The slight sales increase despite poor traffic reflects a “well-organized consumer that efficiently spent more” at fewer stores over the weekend, ShopperTrak co-founder Bill Martin said in a statement.

For the month of November, spending in such areas as apparel and electronics items dropped at least 14 percent, SpendingPulse reported on Wednesday. Sales at department stores and mall-based apparel chains dropped more than 20 percent, and more than 25 percent for consumer electronics. Luxury business fell 24 percent for the month, according to SpendingPulse.