Cyber Monday - The Online Version of Black Friday
A lot of the smaller players who cannot keep up with the big boys cash in on Cyber Monday by offering great discounts on tech deals and the growth in e-commerce indicates that this retail bonanza is just getting started
Cyber Monday, before the name was coined, has been the most active online shopping day after Black Friday. The origin of the day’s name lies in the fact that after shopping in brick-and-mortar outlets on Black Friday, people used the internet to snap up whatever they failed to get a hold of at the stores. The name was coined by a division of the National Retail Federation (Shop.org) in 2005.
In 2005, the day had $484 million e-commerce sales, and they have increased year-over-year (YoY) by 17% on average since 2006. In 2010, sales crossed the $1 billion mark and in 2012, they were $1.46 billion.
The average order value has been increasing 10.4% since 2009. The number of items per order have also been increasing, by 16.6% on average. However, the average order value in 2012 declined from $198.3 to $185.1, whereas the number of items per order increased 8.34%, reflecting the fact that retailers are offering huge discounts and promotions, coupled with free shipping.
With the proliferation of mobile devices and on-the-go internet connectivity, consumers are increasingly using their smartphones and tablets to shop. Applications such as FatWallet’s Black Friday and Slickdeals allow consumers to remain updated about the latest deals and best prices from various retailers.
In 2010, mobile traffic accounted for 3.88% of total traffic and increased to 18.4% by 2012. The traffic from different devices has been increasing every year, but iPad has leading share with 7.1%. Moreover, it continues to have highest market share in driving traffic among tablets over holiday season, with a 90.5% share. According to eMarketer, US smartphone penetration will reach 49% of the entire population by 2014 compared to 36% currently. Additionally, 80% of mobile users will have switched to smartphones by 2014.
According to IBM (IBM) Benchmark data, mobile platforms accounted for 37% of all traffic on Black Friday. Therefore, we can safely assume that mobile traffic on Cyber Monday will increase by more than 30%.
The mobile conversion rate in 2012 increased from 2.99% to 3.62%, which in turn led to a boost in sales.
Mobile sales contributed a meager 2.25% to total online sales in 2010, totaling around $23 million. However, as of 2012, mobile platforms contributed 12.9% of total online sales - making a total of $189 million. The mobile division will contribute more to online sales as smartphone and tablet penetration continues to increase. According to IBM Benchmark data, mobile sales accounted for 21% of total sales on Black Friday and 23% on Thanksgiving Day, reflecting that Cyber Monday will experience higher sales from mobile.
Social networks have lately been the driving force behind communication but in terms of e-commerce they do not have a strong footing yet. Traffic from social media accounted for 0.93% of all internet retail traffic in 2011 and fell to 0.8% the next year. Sales through social media also declined from 0.56% in 2011 to 0.41% in 2012. It might increase this year though, given that social networks drove 1% of sales on Thanksgiving. According to IBM, social media is integral in driving purchase decisions by changing consumer perception and experience.
IBM’s data shows that smartphone penetration, discounts and promotions from retailers, and social media all combined will continue to drive online sales.
All statistics, unless otherwise stated, are sourced from Cyber Monday Reports by IBM Digital Analytics Benchmark, and comScore