Cyber Monday: Shop 'Til You Drop....or Flop?

by Mark Walsh, Nov 26, 2007, 7:00 AM

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Will today be one of the top-selling days of the holiday season for online retailers--or just another Monday?

While retail experts expect a surge of online shopping today, industry watchers appear divided over whether "Cyber Monday"--the online counterpart to Black Friday--will exceed last year's sales as consumers begin their online shopping earlier than ever.

The term was coined by retail group Shop.org in 2005 after online retailers noticed a trend of increased shopping online the Monday after Thanksgiving. Since then, retailers have viewed it as the unofficial start of the online shopping season, with special promotions tied to that day.

Some analysts expect online sales today to surpass 2006 levels. comScore Media Metrix, for instance, projects Cyber Monday sales of $700 million, easily outpacing the total of $608 million on the year-earlier day.

And despite the spread of high-speed broadband connections in homes, Shop.org says many Americans still like to shop at work. This year, according to a BigSearch survey commissioned by Shop.org, 54.5% of office workers with Internet access--or 68.5 million people--will shop at work today, up significantly from the 50.7 percent in 2006 and the 44.7% in 2005.

A bump in e-mail marketing activity could also herald a manic Cyber Monday. A week ago, 49 percent of major online retailers sent out at least one promotional e-mail--up from 29 percent last year, according to RetailEmail.Blogspot, a blog tracking the e-mail marketing campaigns of more than 100 top Web retailers.

"There's a very clear indication from retailers' e-mail marketing activities that they're going to be making a very hard push this Cyber Monday," says Chad White, founder of the RetailEmail blog and director of retail insights for the E-mail Experience Council, an arm of the Direct Marketing Association. "I think sales will be significantly higher this year than last year."

White believes that the heavy promotion for Black Friday sales or special deals early last week will carry over into Cyber Monday. "Retailers love occasions to have sales or promotions," he says, with Cyber Monday being among the latest.

Not everyone views Cyber Monday as a growing tradition for online retailers, however. "What we've seen is that Thanksgiving is getting bigger because stores are closed and people are at home," says Heather Dougherty, director of research at online measurement firm Hitwise. "Now lots of retailers are embracing this idea that people are turning to Web shopping on Thanksgiving so they're having special sales and promotions to help drive traffic on Thursday."

With a bigger marketing push earlier in the holiday season, the emphasis on Cyber Monday as D-Day for online shopping may be waning. Forecasts for declining economic conditions during the fourth quarter and into 2008 may also dampen online spending today and during the holiday season.

Wal-Mart, Macy's and JCPenney have already warned that housing and credit woes, as well as high gas prices, may hurt holiday sales.

Even so, a study conducted by BizRate Research and commissioned by Shop.org found that 72.2 percent of online retailers planned a special promotion for Cyber Monday--up from 47.2 percent two years ago. Whether they'll translate into strong sales will be clear in the coming days.

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