Cyber Monday surges, December outlook uncertain

The strong customer traffic and sales trends retailers’ experienced Thanksgiving weekend extended into Cyber Monday when shoppers maintained their record pace of spending and propelled online sales to new heights.

The online measurement firm comScore said sales on Cyber Monday increased 22% to $1.25 billion compared with slightly more than $1 billion last year and noted that online traffic and average transaction sizes were larger than the prior year. The firm’s chairman, Gian Fulgoni, characterized the spending levels as an historic day for e-commerce and noted that “it was just the second billion dollar spending day on record, following on the heels of Cyber Monday 2010.”

As was the case with Black Friday, Cyber Monday was highly promotional and retailers also engaged in an array of increasingly effective and targeted digital marketing strategies. Combine those efforts with the ongoing shift of a larger volume of sales to the online channel and the result was record sales. What’s now unclear, and the subject of much speculation, is the impact of the extensive promotions on profitability and how much money shoppers have left to spend be it online or in stores.

“Looking forward to the balance of the season, it will be very important to continue to monitor the trend in consumer spending to determine the degree to which retailers’ heavy promotional activity at the beginning of the shopping season, and consumers’ encouraging response, has pulled forward consumers’ future buying,” Fulgoni said. “It will also be vital to see whether retailers’ deals and price discounting, which consumers are now able to discover via so many different digital media channels, will have a negative impact on retailers’ margins this holiday season.”

Some insight into those trends will be gained next week when select retailers such as Target, Costco, Macy’s and mall-based specialty apparel companies report their November sales. Their actual results and expectations for December will provide the best indication of the extent to which demand was pulled forward as a result of heightened promotional activity and earlier than ever opening hours.