Cyber Monday sales reached $6.59 billion, fueled by deals on toys, video-game consoles and televisions, making it the biggest U.S. online spending day ever.
E-commerce spending increased 17 percent on Monday, capping the biggest five-day period of the holiday shopping season that began on Thanksgiving, Adobe Systems Inc. reported.
Now, after winning the bargain-hunters lured by low prices to buy early, retailers are shifting their strategy to woo the procrastinators – shoppers who wait until the last minute and just want to know their gifts will arrive in time. As Christmas draws closer, Amazon.com Inc., Wal-Mart Stores Inc. and others will focus on making items easily available, rather than duking it out on price. Wal-Mart will play up its vast brick-and-mortar presence and in-store pickup services for online shoppers. Amazon will rely on its reputation for quick delivery and convenience, especially with Christmas falling on a Monday this year.
“The tail end of the season will be the make-or-break moment,” said Tamara Gaffney, an analyst at Adobe. “Right now, it’s all about dropping prices, which isn’t nearly as hard as getting things to people at the last minute.”
Smartphone shopping fueled the Cyber Monday sales, accounting for more than 21 percent of revenue and topping $2 billion in a single day for the first time, Adobe said. The $6.59 billion record total spending came on top of $43.4 billion spent online from Nov. 1 to Nov. 26, also an increase from 2016, according to Adobe’s report.
Traditional retailers Macy’s Inc., Sears Holdings Corp. and J.C. Penney Co. have all shuttered stores, creating an opportunity for retailers to fill the void online, said Tom Forte, analyst at DA Davidson & Co.
“There’s a lot of market share out there to be had,” he said.
The large amount of spending from Thanksgiving to Cyber Monday probably benefited all retailers, but margins will be narrow due to steep discounts on must-have items for the holiday season, said Sucharita Mulpuru, an analyst at Forrester Research Inc.
“The challenge for retailers is winning mind-share beyond Thursday to Monday,” she said. “That’s where Amazon sucks up all the oxygen because shoppers know Amazon will have what they want in stock and can deliver it quickly.”
Amazon “handily won” online spending on Thanksgiving and Black Friday, according to a report by John Fetto, an analyst at Hitwise, which tracks 8 million shoppers on 20 million websites. The Seattle-based company had 55 percent of e-commerce transactions from the top 50 online retailers, with Wal-Mart a distant second at 8.8 percent, according to Hitwise. Its shares closed about 0.8 percent higher on Monday.
Shoppers continue to ditch the hassle of crowded stores and malls for the convenience of shopping online. Internet spending during the November-December holiday season in the U.S. is projected to reach about $107 billion this year, more than 11 percent of total holiday retail sales – the largest portion ever, according to EMarketer Inc.
Amazon, the world’s biggest online retailer, is projected to capture half of the e-commerce holiday spending growth, according to Bain & Co.
Cyber Monday became a phenomenon when e-commerce was in its infancy and most people had slow, dial-up internet connections at home. Online merchants noticed a spike in demand when shoppers returned to work where they had high-speed connections and shopping was less laborious.
Most people now have fast connections at home and on their mobile phones, yet Cyber Monday remains en vogue with shoppers conditioned to seek deals. It’s also a day shoppers look beyond big-ticket electronics like flat-screen TVs that dominate Black Friday sales and widen their focus to apparel, toys and beauty products likely to be given as gifts, said Lindsay Sakraida, director of content marketing at DealNews.
“Even though Black Friday is an online event, there are some people who are still turned off by the chaos of shopping over the holiday weekend,” she said. “Cyber Monday appeals to a different kind of shopper who doesn’t want to feel rushed.”