The first big weekend of the holiday shopping season may have started rather sluggishly for brick-and-mortar retailers, but the latest data on retail sales over the Internet during the Thanksgiving weekend — and especially the following Monday, called “Black Monday” — show Web-based commerce continues to thrive.
U.S. consumer Web spending rose 30 percent from a year ago on the Monday after Thanksgiving, which is considered one of the busiest online holiday shopping days, according to Web metrics firm comScore Networks. E-commerce sales that day came to $391 million, compared with $300 on the same day a year ago.
Consumers have spent $6.5 billion online in the holiday season to date, which essentially covers all of November, excluding auction site purchases and online travel sales according to comScore. That’s an increase of 25 percent over the $5.3 billion taken online during the equivalent days in 2003.
"[Web] sales levels are on track to meet expected growth rates for the full holiday season," said Graham Mudd, a senior analyst at comScore. Sales for the entire holiday shopping season, encompassing November and December, are expected to exceed $15 billion, up as much as 26 percent from last year, he added.
Offline, the holiday retail story isn’t quite so jolly.
On Thursday, a broad selection of the nation’s leading retailers, including Wal-Mart Stores, reported sluggish sales for November, as a much hoped for surge in Thanksgiving weekend business failed to materialize.
Many said that although sales traffic was strong on the Friday after Thanksgiving, they “stabilized” over the rest of the weekend, likely signaling that this year’s final holiday shopping tally will be unimpressive, potentially showing percentage growth in the low single digits.
Offline holiday sales growth may be modest this year, but technology research firms like Forrester Research are forecasting that Internet-based sales will increase about 20 percent. That represents much stronger growth than the broader retail sector, but a moderation from the 30 percent climb recorded for Internet retail sales during the same period last year.
Wall Street pays close attention to consumer spending because it represents about two thirds of all economic activity. For retailers, the fourth quarter of the year, which includes the all-important holiday shopping period, is a critical time because it determines whether or not many of them will hit their budget targets for the entire year.
Just as the Friday after Thanksgiving is a big day for retail stores, dubbed “Black Friday” because retailers often turn the corner for their annual sales, moving from red ink to black ink, the rapid growth of Internet retailing has turned the Monday after Thanksgiving into one of the busiest shopping days of the year for Web-based retailers.
The thinking is online sales spike on "Black Monday" because workers return to their jobs, where they are more likely to have high-speed Internet connections that make it easier for them conduct online transactions.
Analysts also say growth of broadband in U.S. homes is fuelling overall Internet shopping, and Web retailers are becoming more reliable merchants, delivering goods on time and developing more sophisticated and easily-navigated shopping sites.
Computer-savvy Web shoppers are also making greater use of a relatively new phenomenon: comparison shopping engines, which allow them to scan prices for items across a number of retail Web sites.
Dan Ciporin, CEO of Shopping.com, one of the most visited comparison shopping Web sites on the Web, said revenue generated from increased traffic Monday was up 30 percent from the same day last year.
“We’re feeling very good about Christmas; it has really come early for us this year,” Ciporin said. “Monday was a record day for us, and that’s phenomenal when you consider that we expect our biggest days to come between Dec 6 and Dec. 13.”
The most sought-after items at Shopping.com on Monday included books, computers, home furnishings, kitchen items and flat-screen televisions Ciporin said. Digital cameras and digital music players were also extremely popular, Ciporin added, with the word “iPod” far and away the most popular search term on the Web site on that day.
“The bottom line for us is there’s a huge shift to mainstream buyers,” said Ciporin. “Comparison shopping sites used to be all about males looking for bargain electronics, but now we think it’s more accurately reflecting the a broader demographic of the population.”
Rob Smahl, director of marketing at PriceGrabber.com, another comparison shopping site, said traffic jumped 20 percent on the Monday after Thanksgiving, making it the site’s strongest day of the year, although the growth began days before the long Thanksgiving weekend and he expects bigger traffic days as Christmas approaches.
“People shop at stores over Thanksgiving and don’t find the product they want, or they can’t find the right price, so they are going online and doing comparison shopping,” he said. “This year’s holiday shopping season is longer than usual, and online merchants are learning how to improve their customer service, so all this is making consumers more comfortable with online shopping.”