The blitz of digital deals that is Cyber Monday provided a much-needed buzzy endcap for the start of the holiday season.
Adobe Digital Index reported midday that Cyber Monday was on track to see $3 billion in e-commerce sales, an 11.9 percent increase from last year’s $2.68 billion. But while the day continues to get larger in terms of sales volume with each passing year, the rate at which it’s growing has begun to slow markedly. This year’s growth is expected to be well below the 17 percent increase seen from 2013 to 2014, when sales for the day hit $2.29 billion.
Part of the reason is that Cyber Monday is now more like Cyber Week — just as Black Friday is now, basically, the entire first three weeks of November when it comes to retail promotions. Michelle Peluso, chief executive officer at Gilt, said that the site launched Black Friday sales on Thursday evening and Cyber Monday sales Sunday at 9 p.m.
“Everyone is pulling this forward a bit. We were no different, and that really benefited us. That, and digital and mobile were kings of the weekend,” Peluso said. She noted that 47 percent of revenue for the five days from Nov. 25 to Nov. 29 came from mobile — on par with a year ago — with overall sales up 16 percent year-over-year.
The traffic came fast enough to knock some of retail’s top players out of the game, albeit temporarily, showing that even some of the biggest names are still adjusting their systems to accommodate spikes in traffic.
Target.com was briefly inaccessible Monday, while hm.com also made some shoppers wait and there were reports that Paypal’s site crashed. Users said they were unable to pay for items in their baskets on eBay late Sunday night or early Monday morning. These outages followed a similar one at neimanmarcus.com over the weekend.
Target reported that Cyber Monday volume on its site was twice as high as that of Black Friday, which had been the retailer’s busiest online day ever.
The rush put the site out of commission for about 30 minutes, displaying the message: “Please hold tight. So sorry, high traffic’s causing delays. If you wouldn’t mind holding, we’ll refresh automatically & get things going ASAP.”
Miffed consumers took to the Internet to voice their displeasure. Messages included “Target is totally unprepared for Cyber Monday” and “Omg, how annoying… can’t even get on!” Other shoppers complained about not getting the 15 percent discount at checkout as Target advertised or finding promoted items sold out or “long lines” for the products.
“As a part of our Cyber Week promotion, today for the first time, Target is offering 15 percent off virtually everything online,” a Target spokeswoman said. “Both traffic and order volumes are exceeding Target’s Thursday Black Friday event, which was our biggest day ever for online sales. To help manage the volume, we have been metering traffic to the site. We have teams working diligently to restore target.com to full functionality.”
Chalk it up to holiday sprawl.
“Black Friday and Cyber Monday are merging into one giant cyber shopping period,” said Jerry Storch, chief executive officer of Hudson’s Bay. “It begins Thanksgiving and runs Cyber Monday, sometimes till the end of the week.” Cyber Monday, Storch said, is still a major volume day. “Keep in mind that the Internet is continuing to grow double digits.” But he did say that Cyber Monday would have been much more robust than it was, were it not for the fact that Cyber Monday deals were being offered days in advance.
Storch said some Web sites are crashing not simply because they are going through busier holiday periods, but rather because of the combination of increased customer traffic with what he referred to as automated, non-malicious “spiders” or programs that visit Web sites and read the pages, investigating sites for a variety of purposes including price comparisons, checking in-stock positions and speed of service. Web sites can defend against the spiders by setting up filters on the Internet though that could be tricky in that there is risk of blocking customers.
According to Adobe’s overall tally, close to $500 million was spent as of 10 a.m. — a record and 14 percent higher than the same time during 2014. Mobile made up 53 percent of all shopping visits and accounted for 32 percent of overall sales, with 20 percent of the total taking place via smartphone and 12 percent on a tablet.
Adobe found the average discount online was 23 percent and that 15 out of every 100 products were out of stock, two-and-a-half times the normal rate.
Tamara Gaffney, principal analyst, Adobe Digital Index, said digital shoppers should prepare for the highest out-of-stock rates to date for the year, especially when it comes to Star Wars toys.
“Consumers are hyped for Cyber Monday, with social buzz more positive than what we saw on Black Friday,” Gaffney said. At midday, Cyber Monday had fueled more than 150,000 social mentions, with 55 percent of the mentions having a positive sentiment (15 percent more than Black Friday’s 40 percent).
Adobe reported that e-commerce sales on Thanksgiving totaled $1.73 billion, with 57 percent of traffic coming from mobile devices — making for a strong start to the four-day holiday weekend. Between Thanksgiving and Sunday, $8 billion was spent online, 17 percent more than the long weekend last year.
The Custora E-Commerce Pulse reported that Cyber Monday revenue as of 12 p.m. EST was up 15.8 percent year-over-year, with transactions up 16.4 percent.
IBM predicted Cyber Monday sales would grow by more than 18 percent, driven by a surge in mobile shopping and products such as Samsung, Sony and LG TVs, the Apple Watch and headphones from Beats by Dre. Still, that increase marked a slowdown in the trend since IBM tracked online sales over the weekend as up 25.5 percent.
The company’s Watson Trend App also found that consumers were rushing to brands that offer barefoot or natural running shoes. “Nike shoe owners in particular are talking about Nike’s Free, the Air Max and Flyknit Racing Shoes, which offer color, design and versatility as both athletic and casual footwear,” IBM said.
Even though there were some hot apparel items, the overall trend is for consumers to switch their spending away from fashion toward other areas, especially technology. The Consumer Technology Association estimated that 56.9 million Americans — 45 percent of all shoppers — bought or planned to buy tech goods over the Thanksgiving shopping week, which ends with Cyber Monday. The group estimated that Americans would spend $40 billion over the week.
Despite all the hype, Cyber Monday still pales in comparison to Alibaba’s Singles’ Day on Nov. 11, which this year generated sales of $14.3 billion on the Chinese Web giant’s platform.
“We have more sales that are spread throughout the year. It seems like Singles’ Day is maybe how Black Friday used to be for us many years ago when we didn’t have as many big day promotions,” said Sucharita Mulpuru, vice president and principal analyst at Forrester Research.
She noted that while Cyber Monday is a big day for the U.S., consumers are now privy to the same offers happening throughout the year. There is no longer that “unique offering” component that once made Black Friday the definitive shopping holiday.
“Store versus Web data over the weekend was a little hard to glean, but today we’re waiting for more information to make its way out. It looks like pretty consistently sales were down in-store, but I don’t think this is synchronized with point of sale systems,” Mulpuru said.
Brick-and-mortar’s sluggishness over the holiday weekend was a juxtaposition to the online numbers, she added, which were consistently up Thursday and Friday in the low-double digits and even higher over the weekend. She cited retailers like Wal-Mart as having a “big Sunday” due to starting Cyber Monday early.
The strong holiday weekend online — and the especially active mobile user base — has led Google to dub Black Friday as “Mobile Friday.”
Mobile shopping-related searches on Black Friday were up 130 percent year-over-year, with increased search interest for Cyber Monday. Google expected a surge in search activity throughout Cyber Monday, but said a significant spike occurred on Sunday evening as “people may start scouting for deals.”
EBay was seeing much the same and a statement from the marketplace called mobile the “big story” of the weekend. From Thanksgiving Day through Saturday, Nov. 28, gross merchandise bought, or GMB, through mobile was 45 percent. The two days that saw the biggest increases for mobile shopping so far were Thanksgiving and Black Friday, each growing 25 percent since 2014.
Meanwhile, at Kohl’s Corp., the company is seeing more sales on mobile than desktop, said Krista Berry, executive vice president and chief digital officer. She added that conversions are particularly high with the retailer’s native mobile app, which now has nine million downloads.
Kohl’s was in its third day of “Cyber Week” promotion on Monday, which lasts until Saturday, Dec. 5. Berry said that the company had “three record-setting days in [online] sales, conversions and [site] traffic.”
Regarding product categories, Berry said children’s wear, home goods and electronics “are doing well.” In home, strong sales are seen across the board, she said. In electronics, hover boards are popular and so too are drones. In apparel, Berry said “activewear has been strong, but it was amplified this past [weekend].”
As for outerwear, a recent cold snap in the Midwest helped juice the segment and Berry said she expects the momentum to continue. As part of the savings this week, the retailer is offering online shoppers 50 to 60 percent off on outerwear and the same markdown on sweaters.
Berry said ease of use on the site and same-day delivery as well as ship from store options were all key to higher sales. Regarding ease of use, the retailer said new this year is a “shopping bag,” which allows shoppers to have one virtual shopping bag that can be accessed by a mobile device or desktop — and is automatically updated across devices.