December 1, 2009 in Business

Online retailers stretch out sales

Web shoppers found deals before start of ‘Cyber Monday’
Mae Anderson Associated Press
 
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Stephen Guymon, left, of Twin Falls, Idaho, and Sanferd Glasses, of Kayenta, Ariz., separate packed boxes for final shipping Nov. 16 in the Amazon.com warehouse in Goodyear, Ariz.
(Full-size photo)

NEW YORK – Retail Web sites kept amping up the deals Monday to try to maintain the holiday weekend’s strong online sales.

Though Web sales constitute only about 10 percent of the holiday shopping pie, they’ve seen most of the growth so far this year – an encouraging sign after last year’s first online sales decline.

Coremetrics, a Web analytics company in San Mateo, Calif., said that as of 1 p.m. Monday, sales for the day that the industry still pitches as “Cyber Monday” were up 19.6 percent over a year ago.

The bright spot offers hope after traditional retail sales came in just above flat for Black Friday, with shoppers packing stores but sticking to their lists, going for deep discounts and practical items.

Investors rewarded online-only sellers Monday above their traditional brethren. Amazon.com shares rose $2.81, or 2.1 percent, to $134.55 on a day when stocks of most land-based retailers fell as Wall Street analyzed the sea of data and anecdotal reports from the weekend.

Deeply discounted electronics such as flat-screen TVs, game systems and netbooks were popular, but more practical items such as appliances and home décor were also big sellers, as consumers took advantage of sales to buy things for themselves.

Many shoppers started looking for online deals ahead of Monday, as retailers stretched their online deals over several days.

Target, Wal-Mart, Amazon.com and other retailers started offering the online equivalent of Black Friday specials on Thanksgiving or earlier.

They stepped it up Monday. Amazon.com was discounting the Apple iPod Touch 8GB for $158, $20 less than Sunday and $40 off the retail price of about $200. Target.com offered a deal Monday for a Garmin GPS system for $186.99, down from $249.99. Free shipping was also prevalent.

Marshall Cohen, chief industry analyst at market research firm NPD Group, said this year saw the “graying of Black Friday,” because deals that typically occurred only on the Friday after Thanksgiving have been spread out over two weeks.

“The holiday spread itself out,” he said. “On Thanksgiving Day, there’s a new tradition, shopping online before you stuff the turkey, putting the turkey in oven and going out shopping.”

The Monday after Thanksgiving is usually far from the busiest online shopping day of the year, but it is typically one of the top 10 busiest. It was dubbed Cyber Monday by the National Retail Federation trade group in 2005 to describe the Monday after the Thanksgiving holiday.

The thinking was that shoppers who lacked broadband Internet access at home would wait until returning to work to look online. But now most homes have broadband.

Analysts expect Dec. 14, the last day consumers can order goods and have them arrive before Christmas, will be the busiest online shopping day.

Keith Harris, 36, an IT consultant for Hewlett-Packard, went out Friday for in-store sales, but he waited until Monday to buy a PlayStation 3 because Walmart.com offered it at the best price on Monday – in a bundle with two games and a movie for $369.

“You’re looking for that once-in-a-lifetime deal,” he said.

Forrester Research analyst Sucharita Mulpuru predicts online holiday sales will rise 8 percent to $44.7 billion. So far, the weekend results are “strong reinforcement of how Web sales continue to outpace store sales,” she said. Online sales account for about 7 percent of retailers’ total sales, though that increases to about 10 percent during the holidays.

Scott Savitz, CEO of Shoebuy.com, one of the largest online shoe retailers, reported that traffic has been robust since Thanksgiving. He expects that Black Friday, not the Monday after Thanksgiving as it had in past years, will mark the first big surge in sales and traffic for his site.

“There is definitely a behavioral shift,” said Savitz. “Clearly, people are seeing that Black Friday will be the start of the holiday season, no matter whether you are online or offline.”

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