Back in 2005, when Cyber Monday was first introduced, the digital path to purchase was a lightly trodden offshoot of the traditional consumer journey. Over the years, however, online consumer traffic has steadily increased and the pandemic produced a dramatic spike in online sales. According to Wikipedia, the term “Cyber Monday” was coined by Ellen Davis (@ellendavis), when she worked at the National Retail Federation (NRF) and Scott Silverman (@scottsilverman), who at time was the Executive Director of Shop.org.[1] The term made its debut in a 28 November 2005 Shop.org press release entitled “‘Cyber Monday’ Quickly Becoming One of the Biggest Online Shopping Days of the Year.” Journalist Kristin McGrath (@KristinCMcGrath) observes, “Cyber Monday is now more than a decade old and was created as an online counterpoint to the brick-and-mortar-heavy Black Friday. In addition to giving online retailers a piece of the Thanksgiving weekend pie, it gives holiday deal-hunters a more convenient shopping option.”[2] She adds, “Whether Cyber Monday still stands on its own or has completely merged with Black Friday and the rest of Thanksgiving weekend is up for debate. In 2020, Cyber Monday and Black Friday were even less differentiated, as the coronavirus pandemic pushed shoppers online. Plus, while Cyber Monday offered some unique savings, many deals were Black Friday repeats.”[1]
Cyber Monday Fades in Importance in an Omnichannel World
For retailers, the pandemic underscored the importance of omnichannel retail operations — it also blurred the line between many physical and online sales. With buy-online-pickup-in-store (BOPIS) and curbside pickup options now widely available, it’s difficult to distinguish in-store and online sales. Last year, McGrath explains, “[Cyber Monday] blurred with Black Friday, with retailers announcing (and even launching) their Cyber sales on the Saturday of Thanksgiving weekend.” In addition, notes Journalist Natalie Koltun (@natalie_koltun), the fact that consumers are finding online “holiday deals” earlier each year makes a special online shopping day, like Cyber Monday, almost anachronistic. She explains, “E-commerce has blurred the lines around the traditional timing of holiday shopping. Several retailers hopped onto last year’s delayed Prime Day in October, which resulted in jump-starting and elongating the buying season. That early timing is back this year, with retailers like Amazon, Target and others offering promotions earlier than ever to maximize sales.”[3]
There are myriad concerns about the efficacy of this year’s online holiday sales that could also make Cyber Monday a bust. The biggest concerns involve supply chain snarls. Koltun explains, “Before gifts can make it under holiday trees, they’ll have to navigate one of the largest traffic jams modern supply chains have experienced. Disruptions are wreaking havoc on industries from retail and CPG to automotive.” This logjam is putting brands in a pickle. Jared Blank, Chief Marketing Officer at VTEX told Koltun, “Heading into the holiday season, brands are rethinking their ad strategies and moving away from product-specific creative given the supply chain issues that are making it difficult to predict whether inventory will be available.” Selling an item as a Christmas gift that won’t make it under the tree could generate a lot of consumer animosity and an equal loss of consumer loyalty. Mike Ferris, Vice President of Global Brand Manager for The North Face, explained to Koltun, “Consumers expect really seamless experiences with a lot of transparency. I think just being transparent around that reality when consumers can expect product that they bought or when product will become available is important from a messaging perspective.”
Will Online Holiday Sales Increase This Year?
Given all the unknowns associated with supply chain challenges, retailers and brands alike are wondering how consumers are going to behave during this year’s holiday shopping season. Marketing expert Sarah Mahoney (@mahoney_sarah) reports both Deloitte and MasterCard SpendingPulse are optimistic in their projections. She writes, “Deloitte says holiday retail sales, including all of November and December, are likely to rise between 7% and 9%, putting the total spending figure between $1.28 trillion and $1.3 trillion. The consultancy forecasts a jump in ecommerce in the 11% to 15% range compared to last season, with a total of roughly $210 billion and $218 billion in internet shopping.”[4] She adds, “Mastercard SpendingPulse sees similar strength, calling for a gain of 7.4% compared to last year. That’s based on a growth of 7.6% on online spending and a 6.6% increase in purchases made in stores.”
Salesforce analysts agree online sales will probably increase this holiday season. A Salesforce press release predicts, “While online sales growth is expected to be moderate compared to last year’s historic 50% surge and more in line with pre-pandemic growth trends, digital shopping habits formed during the pandemic will persist and drive total sales to record rates for this holiday season.”[5] Salesforce forecasts:
• 7% year-over-year overall growth in global digital commerce for November and December (slowing down from 50% year-over-year growth in 2020) and 10% growth in the U.S. (slowing down from 43% year-over-year growth in 2020)
• Total digital sales are expected to reach a record high of $1.2 trillion globally and $259 billion in the U.S.
• Digital commerce growth will be driven by a 20% rise in consumer prices despite fewer global (-2%) and U.S. (-4%) holiday orders expected
Rob Garf, VP and GM of Retail, Salesforce, added, “While last holiday was defined by the last mile, this year is expected to be dominated by the first mile.”
Concluding Thoughts
Online and omnichannel retailers must proceed carefully this holiday season. They simply cannot over-promise on product availability and delivery. Being transparent is essential to maintain customer loyalty. Jessica Wong, Founder & CEO of Valux Digital, also stresses the importance of the online purchasing process. She writes, “The e-commerce sales process itself is at least as important as nurturing a prospective customer. Paying attention to each detail of the process can pay dividends quickly. One of the most crucial parts of the online sales process is the checkout, not only because this is when the proverbial deal is sealed. Successful e-commerce checkouts are smooth, quick and offer added value. During the holiday season, offering gift wrapping for an additional fee and an option to deliver with a blank invoice are extremely popular. Especially when they are advertised upfront, these little touches often make the difference between sale and scroll. During the checkout, avoid asking for information your business does not need. Consumers are wary of giving away too much data, and drawing out the checkout process can cause you to lose sales. Think about the online shopping experience your company offers: Is it an experience customers can enjoy from start to finish?”[5] Rod Sides, Deloitte’s sector leader for U.S. retail and distribution, said in a press release. “Retailers who remain resilient to shifting consumer behaviors and offer convenient options for online and in-store shopping, as well as order fulfillment, will be poised for growth this holiday season, and into the new year.”[6]
Footnotes
[1] “Cyber Monday,” Wikipedia.
[2] Kristin McGrath, “What is Cyber Monday? History and Statistics,” BlackFriday.com, 12 October 2021.
[3] Natalie Koltun, “How product shortages and an extended shopping season are upending holiday marketing,” Marketing Dive, 19 October 2021.
[4] Sarah Mahoney, “First Forecasts: Holiday Spending To Increase 7+%,” MediaPost, 17 September 2021.
[5] Salesforce, “Consumers Expected to Face Higher Prices this Holiday Season — Salesforce Digital Forecast,” Cision PR Newswire, 29 September 2021.
[6] Jessica Wong, “How To Make This E-Commerce Holiday Season Your Best Yet,” Forbes, 28 September 2021.
[7] Ben Unglesbee, “Holiday sales could spike 9% in 2021: Deloitte,” Retail Dive, 14 September 2021.
