How $1.25 Billion Gets Spent In A Day: "Austerity Fatigue" And High Tech

Checking in with IBM, comScore, Mercent, and Envirosell to play Cyber Monday quarterback. Or, as IBM's John Squire calls it: "The best day ever."

Cyber Monday, which was invented by the National Retail Federation in 2004, was little more than a marketing gimmick until this year. Suddenly it's grabbing headlines for setting new sales records—even though a new record has been broken every Cyber Monday since 2006. What changed?  

Although the total spending has increased each year, the percent change declined precipitously in 2008 and 2009, and then recovered somewhat in 2010, according to comScore. But this year spending increased 22%, the largest jump on record. Ten million people bought products online, comScore says, gobbling up $1.25 billion in goods—easily beating the online sales offered on Black Friday.

Given the chilly economy, this turnabout is something of a surprise. One factor may have been "austerity fatigue," says comScore's Vice President, Industry Analysis, Andrew Lipsman. Consumers were so hungry for a break from the ongoing constraints of the financial crisis that they indulged like chocolate addicts at a Godiva outlet.

Shopping sprees at work, where buyers could avoid family members looking over their shoulders as they selected surprise gifts, accounted for half the dollars spent, comScore said. Consumers also had greater-than-ever-access to online promotions and searchable coupons.  Over 550 merchants made special offers on Cyber Monday, including free shipping, hourly specials and exclusives, and sneak peeks of the hourly deals shared via email alerts.

IBM measured the activity on the sites of its 500 U.S. retail clients and found that mobile traffic averaged 10.8%. Shoppers in brick and mortar stores used their phones to scan a product’s barcode or QR and compare prices on the web and prices at real store 10 miles away. The computer giant also found that department stores and mass merchandizer sites were big winners, with 60% higher sales this Cyber Monday than in 2010. It was a “huge, blowout day,” says John Squire, Chief Strategy Officer, IBM Smarter Commerce.

IBM also examined shopping cart page traffic, logging three types of activities that do not necessarily lead to purchases. For all retail, it found that cart sessions—when a site visitor puts at last one item in a cart, or has saved the cart before and returned to open it—remained stable at almost 13% of shoppers compared to a year ago. But the rate at which shoppers converted cart storage into sales was almost 38%, up about 3 percentage points compared to last year. Meanwhile, 62% of shoppers abandoned their carts, down about 2% compared to last year.

Department stores saw more abandoned shopping carts than retail overall. Almost 74% opted out of their carts this year, although that was a 4% decline since last year. Squire says that while these figures are "pretty high," they are due in part to department stores having invested a lot in the ability to save carts, and in encouraging consumers to browse. Whether or not these saved shopping carts can be converted into later purchases remains to be seen.

Gustavo Gomez, Director of Research and Methodology at Envirosell in New York City, says, "Abandoned shopping carts have been hard to quantify because it’s so easy to shop online and decide to buy later. So we will always see abandoned shopping carts and wish lists," he says, "People have several browsers open for comparison shopping."

"Part of the department stores' marketing strategy is for consumers to return, and to hold the cart for them," says IBM's Squire. Typically department stores would like to see abandoned carts in the high 30% to low 40% range, but with this year’s explosion in sales, Squire doubts stores are upset about shopping cart abandonment.

[Image via SXC.hu]

Add New Comment

0 Comments