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Cyber Monday Strong, but Growth Slows

The shopping day lost some steam versus a year ago as merchants focused on the five-day period from Thanksgiving through Monday.

Nasty Gal launched a "Blackout" sale on Thanksgiving and Black Friday.

Digital pure plays and mobile shopping shined on Cyber Monday, but overall the day lost some steam versus a year ago as merchants focused on the five-day period from Thanksgiving through Monday.

Adobe Digital reported Tuesday that online shopping for Cyber Monday set a new record — hitting $2.29 billion, a 16 percent year-over-year increase from 2012, with 18.3 percent of sales, or $419 million, coming from mobile. Pure-play e-tailers came out on top, taking a 42 percent share of all online sales for the day. Retailers overall raked in an estimated 10 percent of their holiday sales during the five-day stretch, with total e-commerce sales of $7.4 billion — up 26 percent year over year.

IBM Digital Analytics Benchmark reported that sales were up 20.6 percent from 2012 — that’s solid growth in a total retail market that is seeing single-digit gains. Mobile sales were responsible for more than 17 percent of overall sales.

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According to Custora Pulse, one in three purchases were completed on a mobile device on Monday, including smartphones and tablets. Even though Apple still dominates e-commerce orders — its devices powered 80 percent of mobile orders on Cyber Monday — Android devices were responsible for 20 percent of transactions, up from 13 percent last year. Custora Pulse reported that social commerce — sales resulting from social networks like Facebook, Twitter, Pinterest and Instagram — were responsible for less than 1 percent of e-commerce sales Monday. From Thursday through Monday, Adobe said that social referral traffic influenced 2 percent of sales, or $148 million.

Sales for Cyber Monday peaked between 8 p.m. and 9 p.m. EST, a welcome spike in activity after an afternoon that seemed a “little soft,” according to Sucharita Mulpuru, vice president and principal analyst at Forrester Research. By the end of the day, retailers were seeing 20 percent to 50 percent growth from last year — a sharp increase from percentages in the high teens that were observed earlier in the day.

Despite industry sentiments that sales occurring earlier and earlier are diminishing the significance of Cyber Monday, she doesn’t believe this is the case.

“Cyber Monday hasn’t plateaued yet; it still has a few good years ahead,” Mulpuru said.

She said the days leading up to shipping deadlines will also see strong sales growth, and the week after Christmas will slow down for e-tailers because they don’t have the “inventory glut that stores have.”

Michael Brown, partner in the retail practice of global management consulting firm A.T. Kearney, agreed. Late shipping deadlines from e-tailers like Amazon will help when it comes to securing last-minute sales.

Amazon will offer one-day shipping as low as $2.99 an item for Amazon Prime members as late as midnight on Dec. 23 and local express delivery for $3.99 an item on Dec. 24 where available. Amazon’s local delivery is available in New York City, parts of New Jersey, Philadelphia, Boston, Washington, Baltimore, Chicago, Indianapolis, Phoenix, Seattle and the San Bernadino area of California.

However, Brown doesn’t think that Amazon’s deal with the U.S. Postal Service — which for the first time will deliver online orders on Sunday to Amazon Prime members in Los Angeles and New York City — will have much of an impact on the online behemoth or its competitors.

“Amazon’s deal with the Post Office will continue to add to their ability to rapidly fulfill consumers’ e-commerce purchases faster than most other retailers. With Christmas being on a Wednesday this year, Sunday won’t be too big of a deal,” Brown said. “In 2017, when Christmas falls on a Monday, Sunday delivery will be huge.”

The real advantage for Amazon will come from its swift logistics network, which has a later cut-off date for guaranteed delivery by Christmas. It’s this — and not necessarily Sunday delivery — that will give Amazon an edge over competitors, he said.

Nasty Gal’s vice president of brand marketing Christian Parkes said that the biggest shift at the e-tailer was a focus on the entire period from Thanksgiving through Monday, and not just Cyber Monday. For the first time, the site launched a two-day Thanksgiving and Black Friday “Blackout” sale, where everything black on the site was 40 percent off. On Sunday, Monday and Tuesday, all full-priced merchandise on the site was 30 percent off. He said that Cyber Monday was the biggest day of the year sales-wise.

Across the entire five-day period Nastygal.com saw “really healthy” double-digit growth, with triple-digit growth for Thursday and Friday. The number of unique visitors was up 30 percent and total visitors were up nearly 50 percent year on year.

“From a consumer standpoint, there’s an appetite that extends outside of that single-day period [Cyber Monday],” Parkes said.

Gilt Groupe, which on Monday reported that sales from Wednesday through Saturday were up more than 40 percent year over year, said that the five-day period — including Sunday and Cyber Monday — was up more than 45 percent from 2012.

This year, the flash-sale site started its Cyber Monday sales on Sunday at 9 p.m. EST to cater to an increasingly international audience, according to Michelle Peluso, Gilt Groupe’s chief executive officer. Although it makes it harder to compare sales to last year, which kicked off the morning of Cyber Monday, Peluso was keen on testing this time slot with global shoppers. Currently, about 10 percent of the site’s sales come from outside the U.S., with another 10 percent coming from Gilt’s joint venture with Japan. (The site is translated into Japanese.)

Mobile sales from Thursday to Saturday comprised more than 50 percent of Gilt’s overall business, but this number dropped slightly to 48 percent from Thursday to Monday. Peluso attributed the dip in mobile activity to consumers returning to work after the holiday weekend and shopping at their desks.

But the pure-play retailers by no means had Cyber Monday to themselves.

Wal-Mart Stores Inc., which is working to integrate its Web operations and physical stores, seemed gleeful after the online shopping rush.

“We had an all-time record sales day yesterday as the momentum we saw on Thanksgiving carried through to Cyber Monday,” said Joel Anderson, president and ceo of walmart.com U.S., on Tuesday.

The company said the period from Thanksgiving to Cyber Monday marked the best five-day stretch in online sales for the retailer ever. Walmart.com processed more than one billion page views over the five days.

In general, though, multichannel retailers reported that Cyber Monday sales were very good but not the blockbusters of recent years. They attributed the change to consumers drawn to shopping earlier as both multichannel and pure plays promoted more heavily this year earlier in the season. There was also a greater tendency by consumers to use the Web to research and reserve products in the stores, and visit the stores to actually make the purchase and take the products home.

As far as the overall four-day Thanksgiving period, Susan Davidson, ceo of Scoop, cited a 200 percent gain, largely because the retailer earlier this year redesigned its Web site and changed the platform. “We’re fully reaping the benefits. We are very, very pleased with our investment in the back-end and the redesign.”

However, the business wasn’t distributed evenly through the Thanksgiving-through-Cyber-Monday-period. As Davidson said, “Cyber Monday was not as strong as Thursday and Friday. We didn’t see the same spike. The highest demand day was Friday.”

She attributed the outcome online for the past few days to consumers shopping earlier, encouraged by widespread promoting, and Scoop ramping up its communications last Thursday and Friday. Online bestsellers for Scoop were footwear, particularly boots; leather jackets; cashmere sweaters; men’s outerwear, and higher-priced items generally, according to Davidson.

One department store executive, who requested anonymity, gave a similar assessment.

“It’s my guess that Cyber Monday was a good day for everyone” though not a magnificent one. “I don’t think that’s surprising. Promoting online may have been spread out over time up to Cyber Monday, like everything else. I think it will be less promotional online from here on. But the tone of the business feels good.”

In terms of product and promoting, the experience online and in the stores was inconsistent through last Monday “with different kinds of promotions and different products,” said the executive.