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Retailers’ New Slogan: TGIM!

4 Dec, 2013 By: Doug McPherson

NEW YORK – The good news: Cyber Monday entered the record books for retailers and it offered a tip for future strategy – think mobile. Overall, 29.4 percent of online traffic was mobile, according to IBM Digital Analytics Benchmark.

That's up 61 percent from last year. Shoppers used smartphones to browse but were more likely to make purchases on a tablet, according to the data.

Overall sales were up 21 percent on Cyber Monday compared with last year, says IBM. Another E-commerce research company, Custora Pulse, contends online sales rose almost 19 percent.

"Cyber Monday is well on its way to being the biggest online shopping day in history," says Custora CEO Corey Pierson told USA Today.

The bad news: Black Friday saw its first spending decline since 2009. While Internet sales may climb more than three times faster than overall retail growth, they still account for just 14 percent of the total, according to the National Retail Federation (NRF).

Still, some analysts see bright spots. Ron Josey, an analyst at JMP Securities Inc., told Bloomberg News, “The results thus far from an E-commerce perspective have been very strong – certainly strong relative to brick-and-mortar stores. This is the first holiday season where mobile is absolutely having its mark on overall retail sales, whether that’s from a smartphone or a tablet. It’s not going away.”

Online spending increased 15 percent to a record $1.2 billion on Black Friday, says comScore. Yet, because of the in-store slump, total purchases fell 2.9 percent to $57.4 billion during the four days beginning with the Nov. 28 Thanksgiving holiday, according to a survey commissioned by the NRF.

Bloomberg says the results reinforced declining investor optimism about U.S. holiday sales, as signaled by the performance of two small-cap stock groups. The Russell 2000 Consumer Discretionary Index has trailed the Russell 2000 Consumer Staples Index by 1.7 percentage points since Nov. 25, reversing almost one-third of its relative gains during the prior two months.

The performance of these indexes in the past week shows investors are less sanguine about the U.S. holiday season, Tim Ghriskey, chief investment officer at Solaris Group LLC, told Bloomberg.

Internet sales may climb to $82 billion in the holiday season, more than three times faster than total expected retail growth of 3.9 percent to $602.1 billion, according to the NRF.

“Cyber Monday has been the single biggest shopping day of the year for U.S. retailers for a number of years now,” said Sucharita Mulpuru, an analyst at Forrester. “The big story is that stores continue to lose share and Web retailers continue to gain share.”

Shopping on tablets and smartphones increased twice as fast in the third quarter as desktop online spending, according to comScore. Web users in August spent more time engaging with retailers on mobile devices than on desktops for the first time, the firm said. eBay Inc.’s PayPal unit said in a statement that mobile payment volume more than doubled compared with a year earlier.

Buying patterns on mobile devices since Thanksgiving have shown that tablets are more popular for purchases, while mobile phones are preferred for browsing. Tablets accounted for 12 percent of purchases, compared with 5.5 percent from smartphones, IBM said. Consumers also dished out more cash when buying on tablets, spending an average of $126.30 per order, compared with $106.49 for smartphones, the company said.

In related holiday shopping news, eMarketer reports U.S. retailers will spend 15.7 percent more this year on digital advertising – bringing the total to $9.5 billion. This year's increase shows a 22.3-percent share of total U.S. digital ad spending, about the same as last year. eMarketer says much of the incremental digital ad growth from retailers will go toward mobile advertising – particularly search, along with select mobile display media with large audiences and strong targeting platforms like Facebook and Twitter.

comScore says advertisers are spending more online because of an increase in online consumer purchases made easier through mobile convenience, showrooming and social commerce. The data firm estimates U.S. consumers will spend $48.1 billion in the U.S., up 14 percent compared with last year. Contributing 13 percent of total digital commerce, mobile commerce sales will reach $7.1 billion for the November and December holiday season.

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