Web retailers step up holiday deals
After jamming malls Friday for discounted flat-screen TVs and toys, shoppers clicked onto their computers at work Monday as retailers ushered in the start of the online shopping season with bargains and marketing hype.
With an increasing number of online merchants trying to outdo one another, shoppers are being bombarded with even more generous discounts, free shipping offers and other enticements this holiday season.
For the Monday after Thanksgiving, dubbed Cyber Monday by the National Retail Federation, plenty of retailers such as Circuit City Stores Inc. offered special one-day coupons. Meanwhile, Walmart.com on Monday began a five-day special on such online-only items as certain flat-screen TVs and cashmere scarves. And Barnesandnoble.com is wooing shoppers with free tote bags if they spend $75 or more.
“It is a very promotional holiday shopping season,” said Scott Silverman, executive director of Shop.org, the online arm of the National Retail Federation. “Many are using today as the platform to launch promotions.” He noted that more retailers offered incentives starting as early as last week.
To fuel the hype surrounding Cyber Monday, the federation launched a site last week called CyberMonday.com, which pulls together online discounts for Cyber Monday and the rest of the holiday season from nearly 400 retailers.
The incentives seemed to be working, according to early reports.
Jewelry retailer Ice.com had a 60% increase in traffic and an 80% increase in sales through noon Monday compared with the same period a year ago, Ice.com founder Pinny Gniwisch said. Walmart.com reported a 60% increase in traffic through noon Monday compared with a year ago.
Although the first Monday after Thanksgiving marks the unofficial start of the online holiday shopping season, it’s not the busiest day for retailers. Internet research firm ComScore Networks Inc. expects that honor to go to Dec. 11 or Dec. 12, making Cyber Monday either the ninth or 10th busiest online shopping day. Last year, the first Monday after Thanksgiving was the ninth busiest day.
Still, Monday marked the first big online shopping surge for many merchants for the season.
ComScore, which excludes travel, auctions and corporate purchases in its results, expected online sales Monday to increase at least 24% to $599 million, from $484 million a year ago. The research firm also reported a better-than-expected increase in online sales to $434 million on the day after Thanksgiving, up 42% from the same day a year ago.
The online shopping surge Monday follows a strong start to the holiday shopping season for brick-and-mortar stores over the Thanksgiving weekend.
One exception was Wal-Mart Stores Inc., which said Saturday that November’s same-store sales would be more disappointing than expected. The glum outlook sent its stock down $1.29, or 2.7%, to $46.61 on Monday as investors worried about the strength of the retail sector.
Nevertheless, analysts are expecting a robust holiday season for stores and in cyberspace, although the growth in business will be slower than a year ago. The National Retail Federation expects total sales for the November and December period to be up 5%, not as high as the 6.1% pace seen in 2005.
As for online holiday sales growth, Jupiter Research forecasts an 18% increase for online sales to $32 billion. That is slightly below the 23% pace in the previous year.
Analysts are carefully monitoring the rivalry on the Internet between online-only stores and brick-and-mortar stores, which are overtaking the lead for online market share. According to ComScore, from 2003 to 2005, sales growth for brick-and-mortar stores’ online divisions grew at twice the rate of online-only merchants.
Physical stores that operate e-commerce sites are realizing that they can “use the Internet to not only sell product but also drive traffic to their stores,” said Gian Fulgoni, chairman of ComScore.
Consumer electronics retailer Circuit City offered special Web coupons just for Monday, including savings of $100 on TV purchases of $1,700 and up, as well as $50 savings on home audio systems purchases of $400 and up.
Throughout the holiday season, Circuit City is giving $24 gift cards to customers if their online orders aren’t ready for pickup at its stores in 24 minutes.
Walmart.com, which recently redesigned its website, Monday unveiled 50 online-only offers on items such as cashmere scarves and flat-panel plasma TVs that would be available through Friday. Carter Cast, chief executive of Walmart.com, said the retailer would be replacing sold-out items with new offers this week.
Among the most popular items Monday on Walmart.com were $289 global positioning systems by Garmin Ltd. and digital cameras by Royal Philips Electronics.
The online-only merchants are fighting back with free shipping and other deals.
Amazon.com Inc. pushed shoppers to get started early by holding an ongoing poll to select one steeply discounted gift item to be offered in limited supplies beginning on Thanksgiving Day.
Online jewelry retailer Bluenile.com for the first time is offering free overnight shipping to its customers, a program that will run through Valentine’s Day. It also sent out e-mails Monday offering 10% discounts through Dec. 7.
Online closeout retailer Overstock.com for the first time offered free shipping, which started Thanksgiving Day and ends today, CEO Patrick Byrne said.
“We’re all competing on shipping promotions,” Byrne said.
