Cyber Monday gimmick becomes a real trend

Two years ago, name given to first Monday after Thanksgiving was a marketing strategy. This year, it seems to be a genuine trend.

4 min read
Two years ago, Cyber Monday was a marketing gimmick in search of shoppers. This year, it seems to be a genuine trend that retailers have embraced.

In a survey of roughly 120 members of Shop.org, the trade group for online retailers, nearly three-fourths said they would offer discounts today for Cyber Monday, as the first Monday after Thanksgiving has become known. Shop.org said 32 percent of adults surveyed last week said they would shop online on Cyber Monday, up from 27 percent in 2006.

Among the merchants participating is HSN Interactive, which is giving first-time customers a discount of 15 percent.

Retailers are hoping that the sales create early demand for goods, thus easing the late-season strain on the merchants' shipping operations. It could also help them record early gains during what could be a cheerless holiday season. Analysts said ripples from the credit crisis and rising fuel costs, among other factors, could damp consumer spending.

Doug Hart, an analyst at BDO Seidman, an accounting and consulting firm, said Cyber Monday sales would account for about 12 percent of the expected $39 billion in online revenue this holiday season. That is similar to the 15 percent share of holiday sales recorded by offline retailers on the day after Thanksgiving, known as Black Friday, he said.

Some online merchants see Cyber Monday promotions as an antidote to the crowds and traffic jams of Black Friday, and are hoping this year's online promotions attract shopping refugees.

It helps that some retailers are more aggressively promoting their discounts. Ice.com, an online jeweler, last year offered a 20 percent discount on 15 items on Cyber Monday. "We didn't go all the way with promotions because we didn't think it was such a great idea," said Pinny Gniwisch, executive vice president of marketing at Ice. "But last year, we saw huge increases in traffic and sales."

The percentage of discounts on Ice will be similar to last year's. This year, however, roughly 12,000 sites that promote Ice in exchange for a commission--like Upromise and FatWallet--are featuring Ice's Cyber Monday promotion.

The sale also appears alongside those of dozens of other online retailers on Cybermonday.com, a site created by Shop.org two years ago. According to Scott Silverman, Shop.org's executive director, 43 percent of the organization's members joined the inaugural Cyber Monday promotion in 2005.

"Last year's response really legitimized it," he said.

Among this year's promotions, 29 percent are one-day sales. Other deals are being offered in the days before and after Cyber Monday or, in some cases, the entire holiday shopping season. About a fourth of the retailers participating are not charging customers for shipping.

Hart of BDO Seidman said this year's Cyber Monday deals would culminate a series of November promotions intended to drive holiday sales sooner. Sales like Target.com's discount on more than 60 gift items, he said, helped set the promotional tone of the month for retailers. Free shipping offers for toys sold on the sites of Wal-Mart Stores and Target show how jittery merchants have become since the recalls of toys made in China, he said.

Among the more aggressive entrants into the Cyber Monday fray is the recently introduced Web site of the retail chain Meijer. The site is cutting 30 percent from the price of many Global Positioning System (GPS) devices, television and video items, and audio products. "Because it's our first year out of the gate, we want people to get used to us," said Dawn Bronkema, Meijer's director for e-commerce marketing.

Meijer will continue offering sales after Cyber Monday, but the discount level could be smaller, and the breadth of selection might not be as wide.

For some online merchants, the idea of Cyber Monday still rings hollow. Bill Bass, the chief executive of Fair Indigo, a seller of fair-trade apparel based in Madison, Wis., said his site would still not offer special price promotions.

"There's something inherently dishonest about it," he said. "If you're giving a promotion now, you're kind of saying you stuck it to people who bought from you when there wasn't a promotion."

Bass acknowledged that the policy could mean his site would lose sales to retailers that offer Cyber Monday discounts. "If you go down that path, you're training your customers to expect promotions," he said.

Like other retailers that rely heavily on catalogs for marketing, Fair Indigo can help encourage earlier holiday shopping by simply mailing catalogs sooner.

Gniwisch, of Ice, said that if nothing else, this year's Cyber Monday success in attracting retailers shows the necessity of persistence in establishing an annual event.

"When something's pushed down your throat continuously, and the Internet becomes more part of your life, the customs of the Internet become more part of your life," Gniwisch said. "So they finally got a holiday for the Internet."