(American Marketing Association) / Alter Agents

Cyber Monday Exposes the Growing Advantage of Online Sales

December 10, 2015

 Cyber Monday Exposes the Growing Advantage of Online Sales

Retail accelerates toward a decidedly cyber future, aided by mobile devices and the high costs associated with staffing and inventory.
Cyber Monday sales this year were $3.07 billion, according to Adobe’s Digital Index, representing a 16% jump from 2014. But what did we learn?

Reading the data, we can draw several conclusions. As forecasted, consumer dollars are clearly shifting from Black Friday in-store spending to Cyber Monday and online in general.

 Cyber Monday Exposes the Growing Advantage of Online Sales

Second, and surprisingly, some of the largest retailers including Wal-Mart reported that fully half of their online orders were placed on mobile devices from the Thanksgiving-through-Cyber-Monday shopping spree. And Target’s now infamous website meltdown lends further credence that Cyber Monday is here to stay.

Cyber Monday sales are still a fraction of the $11 billion, five days of holiday shopping that begin on Thanksgiving, but the data suggests that bricks-and-mortar retailers should not rely on that for much longer. Let’s state it plainly: In five years, online sales will exceed offline retail sales during this period.

While Black Friday sales declined by $1 billion versus last year, let’s note that Cyber Monday itself was not immune to its own bleeding around the edges. Brands were putting out sneak sales and flash sales as early as Wednesday the week before. After Cyber Monday, excess inventory was pushed with post-event sales and clearances. If you tally up all online spending in the week surrounding Cyber Monday, it would likely be a dramatically higher number.

What does this bleed say about the future of Cyber Monday as a tent-pole day for the five-day holiday shopping period? Are we looking at a dilution of the event that mimics Black Friday’s plight? One thing is constant and certain: Despite the impact of the Internet and mobile devices on the holiday shopping experience, end-of-the-year sales remain carved in stone. It’s simply the nature of product inventory and accounting that prompts manufacturers to get their excess inventory off their books before the end of the year. The joys and trappings of this happiest time of the year are more serendipitous than causal.

We also know that major sales events throughout the year are here to stay. China proved with Single’s Day that online shopping works extremely well in a short-term, focused sales environment. And, the rise of flash-sale based companies like Gilt and Zulily speak to the appeal of this sales vehicle, not to mention Kmart’s old-school Blue Light Special in-store promotions. (While the luster for some flash sales firms has been tarnished in the last year, I would offer that is not because of the concept but their lack of inventory, which can be fixed in a variety of ways including creating their own products.)

Ultimately, Cyber Monday and online sales in general have an inherent advantage over traditional retailers: overhead and labor. It would be extremely costly for bricks-and-mortars to support week-long Black Friday-themed sales in the same way online holiday shopping has supported–rather than supplanted–Cyber Monday. Staffing, overtime and inventory would all be strained.

For the same reasons online sales have the advantage of having multiple “Mondays,” or week-long shopping promotions built around other seasonal events, for example, back to school or spring clearance. All of this points to a decidedly Cyber future.

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