Online retail navigates the Cyber Monday conundrum
Happy Cyber Monday! I know it's next week. But really, is it? These days, pretty much every day in November offers an extravaganza of online savings. As I write this, Walmart.com is shaving $549 off a 40-inch 4K HDTV, Amazon.com has a few pages of "Black Friday" deals and BestBuy. com is offering a "rush sale" and the chance to "get a jump on holiday shopping."
These online juggernauts don't want you to wait until the Friday or Monday after Thanksgiving to start buying. They want you to spend now. In fact, they may be counting on it.
Cyber Monday was officially created back in 2005 as a way to get people into the web's digital stores. The internet companies had noticed something unusual in their sales data: people were returning to work after the holiday and using their office broadband to go on online shopping binges. So retailers anchored their biggest internet promotions on the Monday after Thanksgiving and an organic trend was turned it into a sanctioned frenzy of online spending.
Then something unexpected happened. Like Frankenstein's monster, the whole thing got out of control. People waited past the Thanksgiving weekend for the best deals and on Monday orders flooded in, websites were strained and warehouses were pushed to the limit. Each year there seem to be a few high-profile retailers that can't get through the day. Target went down in 2015. Last year, Gap and Macy's faced periodic outages.
Online retailers, it turned out, had cultivated a destructive dependence on a single day, with the number of orders swelling to hundreds of times the usual amount. That's not just dangerous but inefficient: companies had to gird themselves for a surge that comes only once a year. And it's unlikely to change this year. Adobe estimates that next Monday will be the largest online shopping day ever, with $6.6 billion in sales, a 16.5 percent increase from last year.
To protect themselves from the Cyber Monday conundrum, the internet shopping companies are now busy trying to unwind customer expectations and spread deals throughout the week. Thanksgiving itself is expected to generate $2.8 billion in e-commerce sales this year, and the few days after will be big too. Adobe estimates that Thursday through Monday will generate nearly $20 billion in online sales this year.
Smartphones are a main factor in getting customers to buy earlier. People no longer crave the office broadband and can shop while they watch Thanksgiving football or chase their nieces and nephews around the house. In fact, Adobe estimates that for the first time this year, mobile visits to retail sites will exceed desktop visits, 54 percent to 45 percent.
That's probably good news for online retailers that struggle annually to keep up with the Cyber Monday rush. But they still have a tough decision to make. Entice your customers with deals all week? Or trot out the best discounts next Monday, when many shoppers will continue to follow a decade of industry conditioning? For a lot of companies, the holiday season may depend on getting that right.