Holiday shopping online hit a record for Black Friday, several days before the retail industry-coined Cyber Monday gets underway, as more consumers said they used the web to seek deals.
The strong start for web retailers should continue into what is otherwise expected to be a lackluster holiday season, benefiting Amazon.com, Wal-Mart Stores Inc's online unit and Google Inc, analysts said.
Analytics firm comScore said Sunday that U.S. online spending on Black Friday was the strongest it has ever been, up 11 percent over the prior year, with $595 million spent online.
Sales at retail stores rose 0.5 percent to $10.66 billion on that day, the official kick-off to holiday shopping, according to ShopperTrak.
That's pretty significant in a recessionary environment -- to get a record like that and be that far ahead, said comScore Chairman Gian Fulgoni. I still expect Monday should be a much bigger day online than Black Friday.
Cyber Monday is the day when many consumers head back to work after the U.S. Thanksgiving weekend and use fast Internet connections to make holiday purchases, away from the prying eyes of spouses and children. The day has always spurred a flood of special online offers, but this year more are showing up even earlier, experts said.
Forrester analyst Sucharita Mulpuru said she was not surprised by the online strength over the holiday weekend.
I anticipate this momentum to continue for the next several weeks, Mulpuru said. It's a good sign. It shouldn't slow down significantly from here.
Forrester Research has estimated that U.S. online sales in November and December should rise 8 percent this year, up from a 5 percent rise in the year-ago period. ComScore has forecast a 3 percent rise for the period.
AFTER BLACK FRIDAY, THE REST IS ONLINE
Yolanda and Victor Rebagliati were shopping at a San Francisco Old Navy store when it opened Sunday morning for some $5 clothing deals, but said they next planned to head online for an iPod from Apple Inc and a netbook.
After today, the rest is online! said Yolanda.
Experts say bargain hunting is driving the online strength. Searches for Black Friday ads on Thanksgiving and Black Friday were up 50 percent from the prior year, while those for Target Black Friday and Walmart Black Friday were up more than 75 percent in the same period, according to Google Insights for Search.
Online retailers Walmart.com and Amazon have spurred an online price war, and rivals are anxious to keep up, with web deals and free shipping offers advertised from Kohl's Corp, Toys R Us and Best Buy Co Inc.
Jefferies analyst Youssef Squali wrote in a recent note that Amazon and Google are the biggest likely beneficiaries of the online holiday season -- the retailer with its value-priced goods and the search giant that drives traffic to bargains.
Experian Hitwise, which measures traffic to websites, said on Sunday that Amazon was the top visited retail site on Black Friday for the second year in a row -- followed by Wal-Mart and Target Corp.
While retail experts say there is little to inspire a consumer to enter stores in the weeks leading up to Christmas, there is room to rise for online sales.
Fulgoni said he noticed more online deals offered on Black Friday this year than last.
It looks like the retailers figured out that there is no reason for them to leave these deals to Cyber Monday, he said. Everyone is well tuned to the fact that there is a consumer strapped for cash and you have to attract their attention.
Last year, online spending on Cyber Monday rose 15 percent to $846 million, according to comScore.
A savvier consumer that recognizes that some doorbuster deals offered by retailers in stores won't last long due to lower inventory levels this year could also be driving sales.
If you didn't get it at 6 a.m. (in stores) you can probably get it at 9 a.m. on Macys.com, said Amanda Pires, a spokeswoman for eBay Inc online payments unit PayPal, which found that Black Friday payment volume rose 20 percent, with a 25 percent gain on Thanksgiving.
There were some great Black Friday deals and people were out early to get them, Pires said. That mentality has spilled over into the online world.
(Reporting by Alexandria Sage; Editing by Diane Craft