Analyst comScore reports that online shoppers spent a record $1.25 billion on Cyber Monday alone, and that $6 billion was spent throughout the entire “Cyber Week” of online retail sales. Experts note that shoppers in previous years have refrained from revisiting these retailers once the deals are gone, which can hurt some businesses that use the discounts as an incentive to draw consumers in for more holiday shopping before the season winds down. The 15% increase from last year helps, retailers say, but franchisors that emphasize brick-and-mortar sales have not yet seen the volume they desired. For more on this continue reading the following article from Blue MauMau.
With a 22 percent increase in e-commerce sales from last year, Monday, November 28, saw the heaviest online retail buying on record.That’s according to online metric analyst comScore (NASDAQ: SCOR).
“Cyber Monday kicked the week off with a bang as consumers opened their wallets to the tune of $1.25 billion, but it was only the beginning of a very strong week of online holiday spending,” said comScore chairman Gian Fulgoni. “Tuesday and Wednesday followed with billion dollar spending days, helping Cyber Week reach a record weekly total of nearly $6 billion in spending. As the deals from this week expire, it will be important to see the degree to which consumers return to the same retailers to continue their holiday shopping, thereby helping improve retailers’ profit margins, or if we experience a pullback in consumer spending – which has occurred in previous years – before promotional offers and spending intensity pick back up in earnest around mid-December.”
Franchisors tended to emphasize sales at brick and mortar stores, rather than compete against them online. To draw in the crowds, Radio Shack offered $100 dollar gift certificates to those buying Apple products and extended its line up of free cell phones for customers who came into its stores to sign a two-year mobile phone agreement.
On Black Friday as the company tried to bring in customers, Zacks downgraded the publicly traded retailer to underperform. The report from the investment research firm stated why: “Comparable store sales for the company-operated stores and kiosks (those opened at least a year) declined 4% year over year. This is a key retail performance indicator measuring growth from the existing sales locations.”
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Weaker-than-expected growth of the mobile platform and growing marketing expenses are other near-term concerns. Management provided a tepid outlook for the ensuing fourth quarter of 2011.
In the previous quarter, comparable store sales for the company-operated stores and kiosks (those opened at least a year) declined 4% year over year.”
CyberWeek Sales Up 15%
For the week ending December 2, Cyberweek, online retail spending reached $5.96 billion, a 15 percent improvement over last year’s buying spree. The online metric company says that free shipping was used in record amounts to attract shoppers. Thanksgiving week, which ended November 27, saw free shipping occur on 64.4 percent of transactions, while Cyber Week has maintained a similar level at 63.2 percent, roughly 10 percent above last year’s number.
“More than three-quarters of consumers say that free shipping is important to them when making an online purchase, and nearly half say they will abandon their shopping cart at checkout if they find free shipping is not being offered,” observed comScore’s chairman.
Post-Thanksgiving Bricks & Mortar Lull Sets In
While e-commerce sales grew by 1.7% during Thanksgiving, sales for bricks and mortar retailers sagged the week after. The week ending in December 3, 2011 saw retail sales declined by 2.3 percent. That’s according to International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index that tracks approximately 40 retail chain stores. On a year-over-year basis, retail sales also slowed to 3.8 percent.
“The post-Thanksgiving-Black Friday week lull set in as consumers took their traditional break from holiday shopping this past week,” said Michael Niemira, ICSC vice president of research and chief economist. “Despite the weekly dip, the year-over-year pace continues to be healthy as the overall holiday-gift completion rate jumped in the latest week compared with the same period of 2010,” added Niemira.
This article was republished with permission from Blue MauMau.