Should you hold out for Cyber Monday?
Technology has put consumers in control of their online shopping smorgasbord
Cyber Monday is sooo 2005.
It’s only a day away, but some people are all ho-hum about it this year.
“Is there a Cyber Monday? No. Is there a Cyber Three Weeks? Yes,” says Richard Feinberg, professor of consumer behavior and retail management at Purdue University in Indiana.
Or call it the Cyber Five – that is, Thursday, Friday, Saturday, Sunday and Monday of combined sales – online and in stores, which together kick off the annual year-end shopping frenzy and spell either gloom or glory for retailers’ books in 2012.
But Monday itself? True, it’s billed as the “official” start of the online holiday shopping season. And as the marketing gurus tell it, come Monday, many Americans will roll into their offices, fire up their computers, open their e-mails and proceed to shop. About $2 billion worth of shopping just on that day, about 3 percent of the projected two-month holiday online sales haul.
But after a mere seven years, the “tradition,” if you can call it that, of Cyber Monday might be waning in importance. Not exactly over or kaput, but definitely evolving in the face of a rapidly changing retail environment; increasingly savvy, deal-driven consumers with broadband, high-speed Internet access and a slew of shopping-friendly mobile devices in their pockets; and the rise of mighty social media networks.
These days, the argument goes, online shoppers don’t need Cyber Monday anymore. Egged on by a gusher of e-mail deals that have been flooding their inboxes, consumers started buying days, even weeks ago, and will shop all the way up to Christmas, when some of the best deals will be available, albeit in more limited quantities.
“Cyber Monday is passé,” says Fiona Dias, chief strategy officer of ShopRunner.com, a shopping service that offers two-day shipping promises for online retail sites. “It’s passé because if (a retailer) plans to sell 1,000 widgets over a five-day period at 20 percent off, and they’ve sold out by Saturday, then you don’t need to sell any more at 20 percent off by Monday.”
The moral for the consumer: “If you’re waiting until Monday to get a deal, it might not be the wisest strategy because retailers have moved on. Go look on Wednesday.”
Marshal Cohen, lead retail analyst for the marketing analysis firm NPD Group, says that for some years, Cyber Monday was “more hype than reality” anyway. “I don’t think it’s over, but I do think its role is diminished,” he says.
In fact, says Feinberg, the sharpest year-over-year spike in online Cyber Monday holiday sales was in 2010. “We saw a gigantic increase in Internet ordering on that Monday after Thanksgiving, but since then, only smaller increases,” he says.
Brick-and-mortar retailers are also undermining Cyber Monday, Cohen says, by jumping the gun on Black Friday. Many retailers opened their doors – and their deals – on Thanksgiving evening, or even as early as Wednesday.
“That means the spending power that Cyber Monday was going to have is dissipated, and the way online retailers will be competing with those new hours will create a dilution of Monday as well,” Cohen says. “Cyber Monday is not gone completely, but it’s certainly on the way to having significant challenges to maintain the level of intensity of recent years.”
Well! Those are fightin’ words to some.
“To say Cyber Monday is obsolete just sounds foolish,” says Sucharita Mulpuru, a retail analyst at Forrester, a technology research firm. Forrester predicts that November and December will draw $68.4 billion in online revenue, a 15 percent increase over 2011. Cyber Monday is crucial to that, she says, and bigger than ever.
“It is the biggest shopping day of the year for Web retailers – it is huge.”
Yes, the majority of all sales still remain offline. And yes, consumers can shop online any day. But Mulpuru says Cyber Monday is the day that online merchants launch their richest deals and discounts; consumers have been well trained in the past seven years to expect that, so they go looking for them. When? Monday at work.
“The Web in general is taking share from the rest of the retail world, and every day that is growing,” she says. “For the near future, at least three to five years, (Cyber Monday sales) will absolutely at least pace the growth of e-commerce and, because the deals can be so compelling, even outpace.”
Cyber Monday was first conceived by the National Retail Federation’s digital arm, Shop.org, in 2005. At the time, digital retailing was much less common, and only a fraction of American households had broadband, high-speed Internet access – let alone smartphones and tablets. Instead, they had computers at work.
“We saw it as a wonderful way to help people adapt to online shopping at a time when it was still new and intimidating, to show that it’s not so scary and you can get a great deal,” says Vicki Cantrell, executive director of Shop.org.
Nowadays, of all households with computers, up to 90 percent have broadband high-speed access, according to a study by Leichtman Research Group. Still, Cantrell says there’s another reason why Cyber Monday remains valid: free shipping, the No. 1 consumer concern about online shopping, she says.
“Cyber Monday is the big day for the start of offers for unconditional free shipping. It was 12 percent of all online transactions last year, and we’re predicting it will go to 44 percent this year.”
Deals, 365 days a year
Jonathan Ehrlich, co-founder and COO of Copious.com, a relatively new San Francisco-based social marketplace organized around members’ personal interests, says Cyber Monday still has meaning, but it’s been “blunted” by the emergence of a deal-driven culture that it helped encourage.
“You get deals every single day through your Facebook and Twitter streams, so the peak impact of Cyber Monday is not as great as five years ago, when so much was concentrated on this day and Black Friday,” Ehrlich says. “Now it extends for 365 days a year.”
The marketplace is “so noisy” with the onslaught of deal messages that consumers can’t tell one retailer from another, or when a particular deal is valid, he says.
Best Buy, for instance, is getting widespread media coverage for its super-low prices on flat-screen TVs and laptops, but it was not clear to consumers whether they were supposed to stand in line at the door to the store on Friday morning or sleep in and get the same deal later online.
Even now, the vast majority of online transactions happen during the week, not on the weekends or holidays, says Ehrlich. When consumers return to work after the Thanksgiving holidays, their work inboxes are overflowing. The natural inclination, if they haven’t already gone to the mall, is to shop then and there.
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