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Cyber Monday Sales, Can They Measure Up?

Posted on: Tuesday, 2 December 2008, 08:10 CST

A sluggish economy had big name retailers counting on “Cyber Monday’s” virtual crowds to make up for slow sales the rest of the year.

Many stores saw Thanksgiving holiday sales drop off as the weekend progressed so they stepped up online promotions to keep consumers shopping.

Yet, experts were doubtful that the day would give much life to what is still expected to be one of the weakest holiday seasons in years.

"People are expecting that deals will only get better as we approach the Christmas time frame," said Youssef H. Squali, an analyst at Jefferies & Co. On Monday. "So while Cyber Monday is significant I wouldn't say today is the only day to track. People may opt to wait a little more."

In 2005, the National Retail Federation trade group dubbed the Monday after Thanksgiving "Cyber Monday" to describe the unofficial kickoff to the online retail season.

The group estimated as many as fifty percent of customers shopped at their desks as they returned to work.

The day has lost some of its luster with more and more deals advertised ahead of time and more consumers with high-speed access at home.

Many analysts say "Black Friday" crowds were thinner than last year because shoppers were focused on bargains and smaller-ticket items.

According to preliminary figures released by research firm ShopperTrak RCT, more than 50,000 outlets report a 3 percent increase in Black Friday sales compared to one year ago.

John Morris, an analyst at Wachovia Capital Markets, said traffic and business were strong on Black Friday but the "strength did not carry through the remainder of the weekend as business fell off sharply on Saturday."

"After a slow start to November, we believe strength on Black Friday was not enough to save the month," he wrote.

Marshal Cohen, chief industry analyst at market research firm NPD Group, said sales for the Thanksgiving weekend were at best even with the holiday weekend a year ago.

The NRF optimistically predicts that overall holiday spending will rise 2.2 percent from a year ago, which would still mark the slowest growth since 2002.

Many retailers are hoping the traffic has migrated online.

Nielsen Online noted that online traffic grew 10 percent year-over-year on Black Friday to 31.7 million unique visitors across 120 online retailers.

Experts say the most likely candidate for the busiest online spending day is Monday, Dec. 15 because consumer’s rush to make sure gifts can be shipped in time for Christmas.

Source: redOrbit Staff & Wire Reports

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