Cyber Monday Sales Break Records: Mobile Commerce Up, International Consumers Exploit US Thanksgiving Holiday

 @natrudy on December 03 2013 11:05 AM
Cyber Monday_Amazon Warehouse
A worker stacks a shipping trailer with boxed items for delivery at Amazon's distribution center in Phoenix on Nov. 22, 2013. Reuters/Ralph D. Freso

Cyber Monday 2013 just became the biggest online shopping day in history as online sales grew 20 percent, led by booming mobile commerce, according to International Business Machines Corp. (NYSE:IBM) data released Tuesday.

Online U.S. shoppers likely forked out about $2 billion on Cyber Monday alone, according to online retail tracker comScore Inc. (NASDAQ:SCOR), and economics researcher IHS Global Insight last week estimated that holiday online sales will reach $81 billion this year in total, up 12.5 percent from last year.

Cyber Monday 2013 also capped off the best five straight days of online sales on record, according to IBM, as sales from Thanksgiving Day to Cyber Monday grew 16.5 percent from 2012.

“Cyber Monday once again proved to be the star of this holiday shopping season [so far],” said IBM strategist Jay Henderson, in a statement.

Consumers seem to have drifted away from brick-and-mortar retailers like Wal-Mart Stores Inc. (NYSE:WMT) and Target Corporation (NYSE:TGT) this year, despite heavy discounts and earlier store openings. Barclays PLC (LON:BARC) retail analysts expected flat sales this holiday season, noting Black Friday sales among some retailers fell 13.2 percent.

New Yorkers spent the most online this year on Cyber Monday, followed by residents of Washington, D.C., and Los Angeles, according to IBM.

As a category, department stores like Macy’s Inc. (NYSE:M) fared well in Cyber Monday online sales, seeing almost 50 percent more sales growth than furniture and fashion stores.

The selling frenzy may have been led by deals like those announced by Amazon.com Inc. (NASDAQ:AMZN), which said it would flood consumers with new deals every 10 minutes at peak times on Cyber Monday.

Amazon doesn’t break out Cyber Monday sales specifically but said last year it was “our busiest day of the year.” Amazon sold $21.2 billion of goods in fourth-quarter 2012.  

Independent e-commerce consultancy ChannelAdvisor said sellers using Amazon’s platform saw a sales jump of 44 percent on Cyber Monday from last year, besting those who used eBay’s platform (32 percent growth). Kindle e-book sales and video game console and title sales likely drove Amazon’s sales strength this year, wrote UBS AG (VTX:UBSN) analysts in a research note on Monday.

Cyber Monday is also a key day for mobile commerce, it seems. Mobile sales grabbed 17 percent of total online sales, growing significantly from last year.

Although U.S. consumers still prefer desktop buying to mobile purchases, at a ratio of roughly 80-20, mobile commerce is growing far faster than overall e-commerce, eBay (NASDAQ:EBAY) Enterprise strategist John Sheldon told IBTimes on Tuesday.

“It’s an ease and a comfort thing,” said Sheldon, explaining the current disparity. “Mobile devices, particularly smartphones, are still a little bit more cumbersome to complete a complex e-commerce transaction on.”

“I don’t think it’s necessarily about security,” he added, despite surveys indicating that consumers fear mobile shopping fraud.

eBay data showed mobile purchases up by more than 120 percent on Thanksgiving Day 2013, from a year ago. eBay Enterprise helps about 160 major retailers with their e-commerce platforms and strategy.

Still, mobile sales may only start matching traditional desktop and laptop purchases in 2017, according to industry estimates.

Online sales to international customers also saw strong boosts this year, according to Borderfree, an e-commerce strategy firm that helps U.S. retailers sell overseas.

Many U.S. retailers saw overseas sales rise 50 percent on Black Friday from last year’s day, Borderfree data showed. International e-shoppers also took advantage of earlier shopping windows, piling heavily into the 12 a.m.-5 a.m. Black Friday period.

International online Black Friday sales growth doubled Black Friday online sales boosts in the U.S., said BorderFree. The fastest-growing markets include Russia, South Korea and China.

On the whole, actual online sales for the past five days appear to have beaten e-commerce expectations, wrote the UBS analysts on Monday. That may have been driven by consumers searching for rare items, including key electronics like the iPad mini with Retina.

Cyber Monday’s success makes for gloomy comparisons with overall retail growth. Barclays analysts told reporters last week that growth for hardline and softline retailers could range from 0 to 1.5 percent for the fourth quarter.

E-commerce revenues at traditional retailers will definitely outpace their brick-and-mortar sales growth, said Barclays' hard retail analyst Alan Rifkin at a New York retail panel last week.

Many companies have embraced e-commerce revenues as complimentary, he said. Still: “Amazon continues to be a very formidable force within all of retail,” he said.

E-commerce is still only a relatively small slice of overall retail, though investors and analysts have paid much attention to its rapid ascent and disruptive impacts.

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