Cyber Monday: Is E-commerce's Big Holiday Sales Day Obsolete?

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Cyber MondayIn 2005, someone at Shop.org, the e-commerce wing of the National Retail Federation, had an idea: Why not give online retail its own version of Black Friday? Online shopping was getting more popular every year, so it made sense to promote it with a holiday season day of its own. E-commerce sales were already showing a spike on the Monday following Black Friday, so Cyber Monday was born.

The extent to which the decision to promote Cyber Monday as a big shopping and deals day has fed e-commerce's subsequent growth is unclear, but grow it has: Online sales have risen by double-digit percentages every holiday season, and this year, for the first time, more than half of shoppers are expected to do at least some of their holiday shopping online.

Retailers are responding by making more and more of their Black Friday deals available online on Thursday and Friday.

"We're seeing almost unanimously across the board that stores are going to have online Black Friday sales," says Michael Brin, founder of BFAds, which compiles Black Friday circulars as they're released or leaked. "If I was going to shop online on one day in November, it would be Thanksgiving."

And it's not just the traditional retailers' online operations going this route -- big online retailers like NewEgg and Amazon are likewise running big sales on Thursday and Friday, not to mention in the days and weeks leading up to it.

But it also raises an existential question for Cyber Monday: If Thanksgiving and Black Friday are getting more "cyber" every year, do we still need a special day just for online retail?

The Power of the Promotion

NRF spokesperson Kathy Grannis says that even as online deals become more common on Black Friday, Cyber Monday will still have tremendous promotional value for online retailers.

"Much like Black Friday is the one day that [bricks-and-mortar] retail has to pull out all the stops, Cyber Monday is that day for online retailers," she says. "They get to offer some of the tricks they've been holding onto all season."

And they seem to pull out more tricks every year. Bryant Quan, CEO of deal-tracking site SlickDeals, says that in 2009, roughly 900 Cyber Monday deals were posted to the site's forums. By 2011, that number had risen to 1,300. Online-only operations in particular continue to embrace Cyber Monday as their time to shine, free of the distraction of Thanksgiving football and in-store doorbusters.

"There are so many online-only stores, and they rely heavily on Cyber Monday," says Howard Schaffer, vice president at Offers.com. "In talking to our partners, we're hearing that their best deals are going to be on Cyber Monday. They'll certainly have deals planned for Thanksgiving and Black Friday, but on Cyber Monday they know have a lot larger audience."

The sales figures certainly back that up. According to digital analytics firm ComScore, it's been the biggest day for online sales for the last two years, with spending on the day growing from just over $1 billion in 2010 to $1.25 billion in 2011. A spokesperson for ComScore estimates that spending on Cyber Monday 2012 will grow to roughly $1.5 billion.



The Spreading Deal Landscape

If the proliferation of online Black Friday deals is cannibalizing Cyber Monday sales, we certainly haven't seen any evidence of it yet. And as Grannis points out, retailers have trained consumers to look for deals that day, so it's inevitable that they'll continue to make with the offers.

But we're already beginning to see the deal days spread out a bit. In addition to online deals showing up on Thanksgiving and Black Friday, in recent years, Cyber Monday has been morphing into "Cyber Week" on many sites.

"The trend is to keep Cyber Monday going all week," says Brent Shelton, a spokesman for deal site FatWallet, who adds that the week is followed by other big online shopping events. "We're expecting Cyber Monday II on Dec. 5, and then there's Green Monday on Dec. 12 -- FedEx's biggest shipping day, and what used to be the biggest shopping day of the year."

Meanwhile, the changing way we shop online may also make it less important to stick to that one Monday for online shopping.
Will you be heading to the stores on Thanksgiving night?
You bet, I'll be there when doors open at 8pm.1845 (23.8%)
No, it's family time.2972 (38.4%)
I'm going to do my Black Friday shopping online.1118 (14.4%)
And miss football? You must be joking.684 (8.8%)
After turkey, the only thing I'll head to is a pillow.1130 (14.6%)


Stephen Wyss, a partner at accounting and consulting firm BDO, points out that Cyber Monday was initially intended to capture people shopping at their desks at work -- and indeed, data show that much of Cyber Monday shopping happens early in the morning or at lunchtime, both periods when an office worker might be expected to have a bit of downtime. But the average consumer in 2012 no longer has to be sitting at his or her desk to shop online.

"The idea is that Cyber Monday was created for people to shop at work," he says. "But I think you're going to see Cyber Monday lessened as tablets make it easier to shop [anywhere]. Habits will start to change as it gets easier to shop from mobile devices."

In other words, if you have a tablet, you can do your online shopping on the bus, on the couch after Thanksgiving dinner, or even in the mall on Black Friday. And as tablet penetration increases -- which will happen in a big way next month when consumers unwrap the latest generations of low-price tablets on Christmas and Hanukkah -- even more people will find that they can shop on their own schedule, not one set by the industry.

Wyss nevertheless predicts that Cyber Monday will retain its primacy as a promotional event, and the numbers suggest he's right. But retailers know their customers now have the flexibility to shop whenever and wherever they please, and they're already showing a willingness to oblige them by offering big holiday deals on days other than Monday. Expect that trend to continue.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

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