Move over Black Friday, Cyber Monday Tops Charts
Many have heard the term “Cyber Monday” floating around. But what exactly is it? Is it just a marketing term designed to sell more products or it is actually an event worth taking note of? It’s mostly both – and definitely worth paying attention to if you’re looking to buy lots of gifts this Christmas season.
The National Retail Federation is an international group of retail companies, the largest in the world. One of their major divisions, and one that is growing quickly, is shop.org, a consortium of online retailers. In 2005, shop.org coined the term “Cyber Monday,” claiming that “77 percent of online retailers said that their sales increased substantially on the Monday after Thanksgiving, a trend that is driving serious online discounts and promotions on Cyber Monday this year.”
How this pseudo-holiday started was when online retailers wanted to take advantage of the holiday craze for gifts, but could not compete with brick-and-mortar stores for once. Too many people were spending all Friday in line at physical stores and not online with their computers. So to capitalize on the trend, many online retailers started offering significant discounts on the Monday following Thanksgiving. Contrary to popular belief, Cyber Monday doesn’t just apply to cyber gifts like computers, tablets or smartphones, but simply to those goods offered solely online.
Cyber Monday Factoid
Because of its timing on the first workday after the holiday, many people started doing their Christmas shopping while on their work computers. In 2005, 37% of those surveyed said that they would secretly shop online while at work. In 2010, that number nearly doubled!
Despite some employers’ lost productivity from employees shopping online, many online retailers are making lots of money. In 2010, Cyber Monday shopping exceeded the $1 billion mark for the first time at an increase of 16% over the previous year. 88% of online merchants now offer Cyber Monday discounts.
The most common markets for Cyber Monday purchases range from the expected to the surprising. Jewelry and luxury retailers actually see the biggest benefit from the event, while the predictable consumer electronics market experiences the second biggest bump. The demographics of people taking advantage of the sale range wildly too. 70 percent of 18-34 year-olds shop online, but 30 percent of 65+ year-olds do as well. From young to old, more and more people are transitioning into online retail. In 2010, online sales totaled more than 165 billion dollars, meaning that almost a half billion dollars are spent each day on products online.
Sadly for some, all this online activity is taking its toll on previously-established major corporations used to working with a physical business model. Many companies like Best Buy are adapting price-matching strategies to keep up with online sales. However, these guarantees apply only to a limited number of items, and specifically in Best Buy’s case, are suspending that offer during the major shopping week that contains Black Friday and Cyber Monday.