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With the economy still in recovery and consumers nervously looking to stretch their dollars during the year-end holiday season, online shopping on Nov. 30 could be as much a boost to retailers' bottom lines as it is a convenient, often less expensive way for consumers to find that perfect gift.
"Cyber Monday" is the online equivalent to brick-and-mortar retailers' "Black Friday," the shopping day after Thanksgiving. Since Cyber Monday was introduced in 2005, it has grown to be the sixth most lucrative day for online retailers (Black Friday being No. 1), according to e-commerce measurement company comScore.
Cyber Monday accounted for $846 million in online spending in 2008, up 15 percent from the previous year, comScore figures show, even though overall consumer spending was down three percent for the year.
This holiday season, online retailers anticipate some improvement over last year, when the recession was at its deepest.
"I expect this (Cyber Monday) to easily be the biggest retail e-mail day of the year -- and probably the biggest ever on record," said Chad White, a research director at digital marketing company Smith-Harmon. "Cyber Monday has become so well-known that retailers promoted it by name in their e-mail messaging last year -- twice as much as they did in 2007."
The National Retail Foundation (NRF) coined the term "Cyber Monday" after retail experts found that more than 77 percent of online merchants reported an immense spike in sales the Monday after the 2004 Thanksgiving weekend.
While data from various other sources also show significant increases in online shopping for special occasions such as Valentine's Day or Mother's Day, the trade organization decided to launch and market Cyber Monday as a day focusing on shopping for year-end holiday gifts.
While Black Friday will attract up to 134 million early-morning bargain hunters on Nov. 27, the NRF predicts Cyber Monday Nov. 30 will catch the attention of another 85 million shoppers.
Nine out of 10 brick-and-mortar retailers also plan specific deals for Cyber Monday, up 6 percent over 2008, according to the NRF's Shop.org.
Big-name chains such as Home Depot, Target and Toys "R" Us are among the physical stores that will offer virtual promotions and deals on specific products and shipping. J.C. Penney plans to extend its Cyber Monday promotions into Tuesday, and Walmart will offer online deals starting Monday that will extend through Friday, Dec. 4.
The NRF and Shop.org have teamed up with those companies as well as more than 500 others on the shopping aggregate site CyberMonday.com. Proceeds from online purchases will go to the nonprofit Ray Greenly Scholarship Fund, which provides financial support to students pursuing careers in the e-commerce industry.
Amazon.com, the nation's largest online retailer, has also stepped up its marketing effort in response to the demand for post-Thanksgiving shopping online.
The Seattle-based company has already rolled out its Black Friday page, complete with the number of items available per product, savings on shipping, "Frustration-Free Packaging" and new items for sale throughout Thanksgiving week. Amazon will morph its Friday page into a Cyber Monday page a day early on Sunday, Nov. 29.
"There's no need to fight crowds for parking spaces or to stand in long check-out lines just to try and get a handful of deals," said Paul Ryder, Amazon.com's vice president of electronics. "Shoppers really benefit from doing simple research online without leaving the comfort of their homes."
Online research, including identity-theft prevention, is crucial during the holiday gift-shopping season, according to the Better Business Bureau. The BBB urges consumers to take extra provisions to ensure they are dealing with reputable companies, legitimate holiday shopping discounts and Cyber Monday e-mails.
"Scammers are waiting," said David Polino, Better Business Bureau president. "While the online environment has become a trusted marketplace, e-commerce has also opened a door and created a ripe environment for scam artists to set up shop online and start ripping people off."
Despite the potential risks involved in online shopping, the recession will certainly play a role in whether consumers purchase their gifts at the mall or online from their own homes or offices.
In its November report, SpendingPulse, a service of MasterCard Advisors, reported online sales up 19.4 percent in the first half of the month, and suggested higher gas prices as another reason consumers may be sticking closer to their computers to shop this holiday season.
Signal Intern Derek Sedam is a student at Pepperdine University. Signal Online Editor Stephen K. Peeples contributed to this story.
