Double-Digit Increase Expected in Cyber Monday Sales

by Doug Desjardins

Though Cyber Monday has its share of detractors who deride it as a contrivance that’s never been the busiest online sales day of the year, it’s still a major sales event.

In fact, Cyber Monday sales are expected to be huge this year, with research firm IBIS World forecasting a 13.2-percent increase over last year. That compares to a projected increase of only 2.3 percent to 3.5 percent at traditional retailers.

“The appeal of e-commerce is that it allows for easier bargain hunting and price comparisons than brick-and-mortar stores,” said IBIS World analyst Nikoleta Panteva.

Other research firms are forecasting a big increase as well, though there’s some disparity in the numbers. At the low end is online research firm comScore, which is forecasting an 8-percent increase in Cyber Monday sales. At the high end is Forrester Research, which predicts a 16-percent increase in sales.

The National Retail Federation (NRF) says Cyber Monday sales will be almost universal, with its annual retail survey showing that 88 percent of retailers plan to offer special sales and promotions on Nov. 29. Of those, 63 percent plan to market their Cyber Monday deals with emails to shoppers and promotions on social networking sites.

The NRF survey of shoppers found that 54.5 percent plan to shop from work on Cyber Monday. That’s a fairly low percentage, given the fact Cyber Monday started as an at-work phenomena nearly a decade ago when employees used high-speed Internet connections at their offices to shop in an era when few people had that kind of access at home.

Fulfillment companies are also expecting brisk business on Cyber Monday this year. Mercedes Distribution, an e-commerce fulfillment site, said it anticipates processing 15,000 orders, which would be a single-day record.

“Based on incremental order volume, forecasts, and our preparation leading up to Cyber Monday, we expect online retail to achieve another record-breaking shopping season,” said Joal Savino, executive vice president for New York-based Mercedes Distribution. “Fulfillment is a critical component of the online retail experience.”

And these days, so is free shipping. Wal-Mart announced in early November that it will provide free shipping for online purchases for the entire holiday shipping, excluding select items such as tires. That move has prompted other retailers to follow suit. Noam Paransky, an analyst with Kurt Salmon Associates, said Wal-Mart’s decision “makes everyone in retail have to think about how what they have to offer compares.”

That’s reflected in NRF survey results that found 21.6 percent of retailers plan to offer free shipping on Cyber Monday, up from 15.7 percent in 2009. Retailers such as Best Buy and Amazon.com are among the retailers matching Wal-Mart’s free shipping offer, while others like Target and JC Penney are choosing to lower their minimum purchase requirements for free shipping.

Resources

Cyber Monday Gains Clout Among Bargain Hunters

Cyber Monday Deals: Free Shipping Winners and Losers

Cyber Monday Big Business for Retailers

E-Commerce Fulfillment Company Anticipates Record Cyber Monday