The Daily Item, Sunbury, PA

December 2, 2013

Cyber Monday sales soar as Amazon to eBay siphon shoppers

By Danielle Kucera
Bloomberg News

NEW YORK — Cyber Monday sales surged, sending online shopping toward a single-day record as Amazon.com and eBay siphoned consumers from brick-and-mortar stores.

Online sales rose 19 percent from 2012 as of 9 p.m. in New York, IBM said in an emailed statement. Retailers catering to smartphone and tablet users are benefiting the most, with mobile traffic accounting for 30 percent of the total site visits, an increase of more than 58 percent from last year, IBM said.

The results deliver another blow to physical stores, which just suffered the first spending decline on a Black Friday weekend since 2009. Web sales this holiday season are projected to climb as much as 15 percent to $82 billion, more than three times faster than total retail growth of 3.9 percent to $602.1 billion, the National Retail Federation said. Mobile devices drove 16 percent of online purchases, IBM said.

“The results thus far from an e-commerce perspective have been very strong — certainly strong relative to brick-and- mortar stores,” Ron Josey, an analyst at JMP Securities in New York, said in an interview. “This is the first holiday season where mobile is absolutely having its mark on overall retail sales, whether that’s from a smartphone or a tablet. It’s not going away.”

Retailers like Seattle-based Amazon are chasing e-commerce holiday revenue that Forrester Research Inc. projects to rise 15 percent to $78.7 billion. Online spending increased 15 percent to a record $1.2 billion on Black Friday, according to research by ComScore.

Still, because of the in-store slump, total purchases fell 2.9 percent to $57.4 billion during the four days beginning with the Nov. 28 Thanksgiving holiday, according to a survey commissioned by the National Retail Federation.

Online retailers are catering to consumers such as Camille Schmidt, 25, who owns a marketing company and primarily shops on the web. Schmidt scanned her email for big discount headlines this morning and has allotted time to shop after work this evening.

“I’m looking for the highest percentage discount,” she said in an interview, noting that she’s eyeing a coupon for 40 percent off at Juicy Couture that appeared in her inbox this morning. “I usually know what I want, and they’re usually designer brands. I’m just waiting to see how far they’ll go.”

Amazon lured consumers on Monday with deals such as half off Mattel and Fisher-Price products, 46 percent off a Canon digital camera and 65 percent off men and women’s cashmere. EBay, based in San Jose, Calif., has similar discount offers, like more than 80 percent off diamond stud earrings. Physical stores with websites are following suit. J.Crew’s Madewell is offering 25 percent off all merchandise and free shipping.

Amazon’s same-store sales rose 47 percent from last year as of 10:30 a.m. New York time, while eBay’s increased 21 percent, according to ChannelAdvisor, which provides services to sellers on both of those sites. EBay has said it expects Monday to be its biggest shopping day this season.

“Cyber Monday has been the single biggest shopping day of the year for U.S. retailers for a number of years now,” said Sucharita Mulpuru, an analyst at Forrester. “The big story is that stores continue to lose share and web retailers continue to gain share.”

Shopping on tablets and smartphones increased twice as fast in the third quarter as desktop online spending, according to ComScore. Web users in August spent more time engaging with retailers on mobile devices than on desktops for the first time, the firm said. EBay’s PayPal unit said in a statement that mobile payment volume more than doubled as of 2 p.m. New York time compared with a year earlier.

Buying patterns on mobile devices since Thanksgiving have shown that tablets are more popular for purchases, while mobile phones are preferred for browsing. Tablets accounted for 9.8 percent of purchases, compared with 5.7 percent from smartphones, IBM said. Consumers also dished out more cash when buying on tablets, spending an average $128.30 per order, compared with $110.95 for smartphones, the company said.

“Consumers continue to expect to shop and pay at their convenience during the holiday season,” said Stacy General, a customer experience advocate for PayPal.

Many retailers are also subsidizing shipping over the holidays to compete with Amazon’s discounted two-day service and plans for Sunday delivery, which has couriers projecting higher shipping volumes.

The U.S. Postal Service expects to ship 420 million packages during the 2013 holiday season, an increase of about 12 percent from last year. UPS is expecting to pick up 32 million packages on Cyber Monday, an increase of 10 percent, the company said.

“Online sales growth continues at a much faster clip than overall retail sales,” said Alan Gershenhorn, UPS’s chief sales and marketing officer. “We experienced some nice results this weekend.”