Monday was the biggest day of online shopping in history, and it came on the heels of all-time high e-retail sales on Thanksgiving and Black Friday. Don’t think for a second, however, that any of this means shoppers will be abandoning physical stores anytime soon.
Cyber Monday 2012 was expected to be an epic day for online sales, and it didn’t disappoint. In all likelihood, e-commerce transactions reached around $1.5 billion during the day, up from $1.25 billion on Cyber Monday last year, according to comScore. IBM data indicates that total online sales on Monday were up a whopping 30% compared to Cyber Monday 2011. In its press release publishing the numbers, IBM offered the following insights:
“Cyber Monday was not only the pinnacle of the Thanksgiving shopping weekend but when the cash register closed it officially became the biggest online shopping day ever,” said Jay Henderson, Strategy Director, IBM Smarter Commerce. “Retailers that adopted a smarter marketing approach to commerce were able to adjust to the shifting shopping habits of their customers, whether in-store, online or via their mobile device of choice, and fully benefit from this day and the entire holiday weekend.”
Now, there’s no question that in terms of sales growth, Cyber Monday’s online transactions blew away traditional in-store purchases that are the heart of Black Friday. In fact, in-store sales were down 1.8% on Black Friday 2012. But was Cyber Monday truly “the pinnacle of the Thanksgiving shopping weekend,” as the IBM quote above would lead us to believe?
Not a chance.
Online sales hit record highs on both Black Friday and Cyber Monday, likely topping $1 billion and $1.5 billion respectively. While these figures are enormous, they still represent only a small portion of overall spending during the frenzied weekend of “door busters” and clogged malls. The National Retail Federation estimated that consumers spent $59.1 billion over Thanksgiving weekend. In the NRF’s survey, the average shopper spent $423 over the weekend, including $172 online. That indicates that e-retail purchases accounted for about 41% of the average shopper’s total weekend spending, up from 38% last year.
Does that mean that around 40% of holiday purchases are now taking place on the Internet? The numbers relating to actual sales (rather than surveys) indicate otherwise. A Wired post breaks things down:
The National Retail Federation says its survey results show spending over the Black Friday weekend topped $59 billion. Divided across four days, that’s nearly $15 billion per day. Even if a full $1 billion of those sales each day took place online, that’s still less than 7 percent of total spending. This is consistent with e-commerce’s share of consumer spending any other time of year. All of which leads to a less-than-revolutionary dog-bites-man headline: People still shop in stores. A lot.
This doesn’t mean that online commerce is insignificant; when you think about it, 7% is amazing considering that e-retail didn’t even exist two decades ago. (Amazon.com was founded in 1993.) But the idea that stores will be replaced whole hog with web-only retail is silly. Even a recent Reuters column lamenting how the and-mortar business model makes less and less sense everyday admits as much:
Physical shopping won’t ever end, and will always probably comprise a majority of retail sales. But the journey from the current cost structure and approach to one which is profitable and sustainable will be difficult.
For the time being, retailers must figure out ways to tempt shoppers in every way, and in every place possible—in stores, certainly, but on screens of all shapes and sizes as well. As IBM Smarter Commerce’s Henderson told USA Today, “the implication for retailers is that the winning strategy this weekend was retailers who made it easy for consumers to buy however they want it.”