Reports of a successful Thanksgiving weekend run of business are lifting expectations that Cyber Monday will be another record-breaker.
According to Adobe Analytics, “Cyber Monday is on track to become the biggest U.S. online shopping day ever.”
Adobe said that as of 10 a.m. Eastern Standard Time Monday, $840 million was spent online, representing 16.9 percent growth year-over-year.
Overall web traffic was up 12 percent, with the season average at 5.7 percent, Adobe said, adding that mobile set a new record, representing 53.3 percent of visits including 44.6 percent using smartphones and 8.7 percent on tablets, representing 39.7 percent of the revenues.
Consumers this holiday season so far seem to be in a better spending mood, whether that’s online or in the stores, armed with more cash in their wallets and a better outlook on employment and the economy. There is also pent-up demand for apparel, including outerwear.
Also, there are plenty of sharp markdowns running frequently. Adobe said toys have been reduced in price by 18.8 percent since Oct. 1. Computers are priced down 14.7 percent, while TVs are down 21.1 percent.
While Cyber Monday expectations are high, some retailers unleashed deals early and others have been advertising “Cyber Week.” The extended promoting will siphon some business from the actual Cyber Monday.
Sears Holdings, for example, advertised “Cyber Week deals” on sears.com and kmart.com through Dec. 2, including home appliances up to 40 percent off, an extra 10 percent off tools, and up to 50 percent of sporting goods. Also among the litany of deals revealed Monday, the Sears and Kmart divisions are offering free home delivery for online purchases on all orders over $399, through Dec. 25, and through Dec. 2, Sears is offering hundreds of dollars in points depending on how many Kenmore appliances were purchased.
At Macy’s, an e-mail sent out Monday promoted an extra 20 percent off, with exclusions. Some categories were just an extra 10 percent off. The e-mail also touted “Cyber Week Specials” that began on Sunday through Wednesday.
Cabela’s, which sells shooting supplies, camping gear, clothing, footwear and fishing equipment, advertised that it was “dishing out deals during Cyber Monday and Cyber Week” for a “full week of hot savings” at Cabelas.com.
Open Road Integrated Media, a digital publishing company, also got into the Cyber Week mode, unveiling sales across their online retail partners beginning Cyber Monday, discounting hundreds of book titles at Amazon, Apple iBooks, Barnes & Noble, Google and Kobo throughout the week.
E-tailer Everlane took a pass on Cyber Monday and sent an e-mail out noting, “This is not a sale…because our transparent prices are already 50 percent lower than most retailers. Every. Single. Day.”
Barclays equity research analyst Matthew McClintock noted that online sales were the biggest winner during Black Friday weekend, adding, “Adobe expects Cyber Monday by itself to drive $6.5 billion in sales this year, demonstrating the decreasing relevance of business in the stores over Black Friday weekend.
“The litmus test will ultimately be the promotions that we see over the next few weeks, as retailers who misjudged the underlying elasticity of their pricing strategies will likely be forced to take immediate actions to improve upon any volume shortfalls they experience over the weekend,” McClintock said. “We continue to believe that holiday 2017 could end up more promotional than in previous years, with the potential for acceleration in consumer savings as we progress deeper into the season.”
Following reports of positive results over Black Friday weekend, driven by strong online business and satisfactory traffic in the stores and malls, several major retail stocks rose Monday morning. TJX was up o.44 percent to $71.18; Express rose 4.9 percent to $8.19; Gap rose 2.5 percent to $30.38; Amazon was up 1.7 percent to $1,205.51; Wal-Mart was up 0.39 percent to $97, and Nordstrom rose $1.07 percent to $41.40.
Target was flat at $55.88, and Macy’s, after correcting a technology glitch on Friday stalling transactions in the stores, slipped 1.5 percent to $20.75.
“We had a great start to the holiday season with five weeks left to go. We did experience a systems issue on Friday, but, once resolved, our teams quickly recovered the business and we finished the day strong,” said a Macy’s spokeswoman.
Among Macy’s bestsellers, sweaters, coats and fleeces, with more than a half million coats sold since Thursday evening, the spokeswoman said Monday. In addition, $29.99 diamond stud earrings with any purchase of $50 or more; the Apple watch; fragrance, mascara and lipstick gift sets, Michael Kors handbags, and activewear were best-selling items and categories.
Retailers are putting more of their marketing dollars into the fourth quarter in particular to hype deals running online.
“In a state of seemingly perpetual promotional offerings, we believe companies are turning toward marketing levers, including a shift toward digital, to try to differentiate from their peers,” said Simeon Siegel of Instinet LLC Equity Research. “With most of our coverage universe having reported third quarter, many companies noted a planned increase in marketing spend into the fourth quarter, driving SG&A pressure.” Siegel noted “a stretching out” of Black Friday and Cyber Monday promotions.
Wells Fargo Securities reported that the retail group has “outperformed nicely since the beginning of November and for the first time in three years, it seems like retailers are not “in the hole” to start the fourth quarter. “Adding a little more fuel to the fire, we believe Black Friday week was a success that should give investors a little more confidence as we move deeper into the holiday.”
Regarding the Thanksgiving weekend period, Wells Fargo said “apparel appeared to be the positive standout — with lean inventories and improved pricing across most retailers,” notably Victoria’s Secret and Urban Outfitter brands.
The Fung Global Retail Tech team visited 33 stores in Manhattan, Southampton and Staten Island, N.Y.; Las Vegas; Pittsburgh, and Paramus, N.J. “Traffic and inventory levels were satisfactory overall,” Fung reported. “Among the stores we visited, Wal-Mart, Nike and Best Buy were the biggest winners in terms of traffic on Black Friday, and they offered excellent traffic control and in-store experiences.
“The team was impressed by the quality of in-store customer service we saw across retailers; service seemed significantly better than on Black Friday last year. Retailers appear to have invested more in training for temporary staff this year.”