Online Retailers Get Ready For Cyber Monday
Posted on: Saturday, 29 November 2008, 08:30 CST
Despite the heavy duty deals for online companies during "Cyber Monday", the sales are expected to be fairly flat after years of strong growth.
Things like offering free shipping, finance options and deals of $10 off $50 or more will be the strategy behind pushing online sales.
"Last year, people were spending a lot more money on gifts and products," says Jeff Wisot, vice president of marketing for online retailer Buy.com. "With the economic challenges arising this year, people are definitely spending less."
"Cyber Monday" is a termed used by the trade group National Retail Federation in 2005 to describe the Monday after Thanksgiving holiday as the unofficial kickoff for busy online retail season.
However, this year, sales are not expected to be so good as consumers grapple with shaky economy, mounting job losses and a prolonged housing slump.
The trade group expects that during the holidays, spending will total about $470.4 billion, a 2.2 percent rise from a year ago but the slowest growth since 2002. Online retail is being hit hard along with other retail stores according to ComScore, a digital technology monitoring company. It expects online retail spending for November and December to be flat.
The expected slowdown in online growth is "dramatically different than what we've seen," says Marshal Cohen, chief industry analyst at NPD Group. "Consumers are not in a rush to shop."
Online retailers are offering a bounty of deals in an effort to entice consumers.
Sites like Buy.com are offering free shipping on most items, instant rebates and deals on TVs, GPS devices and other items.
Another online company, BlueNile.com an online jeweler, sent out a targeted e-mail promotion offering $100 off of a $500 engagement ring. Meanwhile, Amazon.com will take up to 65 percent off watches and other one-day deals.
"We're bringing prices down as low as we can get them," Berman says. "These are great deals."
Online auction site eBay.com is offering deals like $1 holiday doorbuster items hidden on the site that customers can hunt for. Also, a 65-inch Panasonic plasma HDTV and a 2009 Chevy Corvette.
Toys "R" Us is offering more online promotions than last year, like 70 percent off Star Wars figures and $50 off the normally $59.99 Guitar Hero wired guitar controller.
PayPal, an online payment site, is even getting into the holiday spirit. They are teaming up with online retail stores like Toys "R" Us and giving customers a $10 off coupon of purchases of $50 or more.
Dr. Michael Belch, a professor of marketing at San Diego State University, says all the deals, rebates and discounting offers still remain to be seen if they will help.
"There's little doubt the consumer is still going to be very price sensitive," he says. "They're going to be looking for values."
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Source: redOrbit Staff & Wire Reports
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