Study: Cyber Monday Takes Some Out Of The Line

Cyber Monday has only been around for five years and yet its impact on the retail community is undeniable.

The National Retail Federation's (NRF) web division, Shop.org has taken credit for the term's origin, saying it began back in 2005 when retailers noticed a trend of people shopping online on the Monday after Thanksgiving. Since then it has become part of the pre-Christmas retail vernacular and now some studies say it has surpassed Black Friday in terms of popularity.

A recent survey from research firm Compete found more people were willing to shop on Cyber Monday this year rather than Black Friday. Forty-five percent of those surveyed said they will hit the web on Cyber Monday while only 37 percent said they will stand in line on Black Friday. The contrast could mark a stark change in the way price-savings retailers operate during their busy season.

We found more people are planning on doing Cyber Monday this year rather than Black Friday. That is a trend that's actually been happening the last few years. People see it as easier, more convenient, they don't need to go to the shops and they can do it from the convenience from their own computer, said Debra Miller Arbesman, senior associate in retail and consumer products at Compete.

The study said 30 percent of the people surveyed indicated they were doing half of their shopping online, an incredible number according to Arbesman. She said big purchases, like for high-priced electronic devices such as TVs, are the only products still favored by consumers in store on Black Friday rather than via the web on Cyber Monday. In fact, the average Black Friday shopper expects to spend $353 and while Cyber Monday shoppers averaged an expected $233.

Retailers seem to be catching onto the emerging holiday faster than the consumers that support them. Midwest supercenter chain Meijer, which has both an online and physical presence, said recently it expects its holiday sales to double because of Cyber Monday.

We've implemented a number of steps that translate directly into more deals for customers, including eliminating shipping costs for thousands of items, introducing fun promotions, and overhauling the design of the site to make it easier to find products and get answers to any questions you might have. Given the tough economy we're in, it's a bold prediction to say you'll double sales, but it's one that we feel confident in making, Dawn Bronkema, director e-commerce marketing at Meijer, said in a statement.

The company said it is offering customers free shipping on its website, www.meijer.com, as a way to attract customers online. It will also do daily deal promotions, and many of its high-priced electronic devices will be sold especially cheap on Cyber Monday.

Apple is also promoting special web sales, but they are not waiting until Cyber Monday. The manufacturer of popular devices such as the iPhone, iPod and iPad, is promising consumers a special one day Apple shopping event, this Friday at the Apple online retail store. A representative from an Apple retail store in New York City said he still expects heavy traffic in store on Black Friday.

Representatives from Apple's corporate office could not be reached for further comment.

According to an NRF survey, this kind of web promotion is becoming more commonplace. The survey found 88 percent of retailers said they had a special promotion for Cyber Monday. In 2007, only 72 percent of retailers had a special promotion. Forty nine percent of retailers have a specific Cyber Monday promotion in mind, up seven percent from last year.

Cyber Monday has become such a crucial component of the holiday season that many retailers - and shoppers - don't remember the holidays without it. And just when we think that Cyber Monday can't get any bigger, it does, Joan Broughton, Interim Executive Director of Shop.org, said in a statement.

Kathy Grannis, spokesperson for the NRF, said both pure play companies (companies like Amazon, without a physical presence) and traditional brick-and-mortar retailers have taken to Cyber Monday. However, she does not see it impacting the sales for Black Friday.

Physical retailers on Black Friday are not competing with Cyber Monday. They are reaching a different kind of shopper. In recent years, retailers began to offer Black Friday online deals to attract shoppers who want to get in on the action and may not want to get to the stores, Grannis said. We haven't seen anything that would correlate a drop off in Black Friday sales.

Rob Enderle, technology analyst for The Enderle Group, said the flexibility online retailers have will play heavily into their advantage. Online retailers have been smart and gone up with their promotions early, they are trying to capture people early for shipping time, he said. For gifts under $200, you can get it pre-wrapped until the last minute and not have to rush. It gets shipped right from the provider, gift-wrapped with a note.

Representatives from Target and Wal-Mart both said they do not disclose specific sales numbers that might indicate any kind of impact web sales have had on physical store sales.