Online sales jump on Cyber Monday, eBay shines

SAN FRANCISCO — Online sales jumped on Cyber Monday, sending e-commerce retailers’ shares higher and suggesting strong growth from earlier in the holiday shopping season is continuing for now.

Sales on eBay Inc’s online marketplace were particularly strong and Amazon.com Inc continued its rapid holiday shopping season growth, according to early Cyber Monday data released by e-commerce firm ChannelAdvisor.





EBay’s shares climbed 4.9 percent to close at $51.40. The stock hit an intra-day high of $51.78, the highest level since early 2005. Amazon’s shares gained 1.6 percent to $243.62.

Cyber Monday has been the biggest online shopping day in recent years, as workers return to offices and use computers to make holiday purchases. ComScore expects online sales to hit a record of about $1.5 billion by day’s end.

Online sales were up 25.6 percent as of 3:00 pm EST on Monday, compared with the same period a year ago, according to International Business Machines Corp which tracks transaction data from 500 U.S. retail websites. In 2011, Cyber Monday year-over-year growth was 15 percent by 3:00 pm, IBM said.

Strong online sales growth on Thanksgiving Day and “Black Friday” sparked concern that shoppers were just buying earlier, threatening revenue later in the season.

“So far, that is not the case,” said Jay Henderson, the strategy director for IBM Smarter Commerce. “Extending the shopping season has really just fueled additional online spending rather than cannibalizing days later in the season.”

ChannelAdvisor said client sales – or sales generated by third-party merchants using the company’s software – soared 57 percent on eBay.com early on Monday, compared with the same period in 2011.

The growth rate was five times higher than during the same period last year, said ChannelAdvisor, which helps merchants sell more online.

“The early eBay numbers are impressive,” said R.J. Hottovy, an equity analyst at Morningstar. “They put together an effective marketing plan across several channels this holiday season – online, television and print.”

EBay has been trying to move away from its online auction roots, emphasizing new items selling at fixed prices to better compete with Amazon.

“The numbers suggest they’re having success reintroducing consumers to the ‘new eBay,’” Hottovy said.

PayPal, the payments division of eBay, said the volume of mobile transactions it processed by 2:00 pm EST on Cyber Monday almost tripled versus the same period last year.

Client sales on Amazon.com were up 52 percent during the first part of Cyber Monday, ChannelAdvisor also reported.

“Amazon continues to look impressive to us since it is building on top of large numbers,” said Scott Tilghman, an analyst at Caris & Company.

Discounts

Online retailers held back some of their best promotions and biggest discounts until Cyber Monday, which helped spur sales, IBM’s Henderson and ChannelAdvisor’s Wingo said.

Amazon offered $30 off its 7 inch Kindle Fire tablet, which usually sells for $159. The deal was only available on Cyber Monday and was still available at 5:00 pm EST.

EBay promoted Cyber Monday deals on iPads, made by Apple Inc, and Nook devices from Barnes & Noble.

These types of discounts attract shoppers to Amazon and eBay’s websites, where they may purchase other items too, Wingo explained.

‘WII U’ sells out

EBay has also benefited as some hot holiday items sold out this year at some retailers. When that happens, shoppers often turn to eBay, where third-party sellers are usually still offering the items at higher prices.

Nintendo Co Ltd said on Monday its new “Wii U” video game consoles sold out at retailers in the United States.

The devices were still available on ebay.com on Monday at 10 to 20 percent above the suggested retail price, according to Jesse Divnich, an analyst at video game research firm EEDAR.

Margin question

Despite strong sales data, analysts are concerned that heavy discounting may pressure retailers’ profit margins, online and offline.

The average online order size on Cyber Monday was $130.30 as of 3:00 pm EST. That was down from almost $200 during the whole of Cyber Monday last year, according to IBM.

Online order sizes are shrinking as consumers buy more digital goods, such as e-books, music and video, which generally cost less. However, discounting is also pressuring order size and that could feed through to lower margins, Morningstar’s Hottovy said.

EBay margins should be relatively well protected because the company charges a commission on sales by third-party merchants and retailers.

Amazon operates like this, but, unlike eBay, the company also has its own product inventory so it may be exposed to margin pressure, according to Colin Sebastian, analyst at R.W. Baird.

source: interaksyon.com

US shoppers welcome early start to 'Black Friday'

NEW YORK/BLOOMINGTON, Minnesota - Retailers declared their experiment with earlier store openings to kick off the holiday shopping season a success on Friday, with those new hours expected to be a Thanksgiving night staple for more retailers next year.

Stores such as Target Corp opened hours before midnight on Thursday to try to capture a bigger piece of the retail pie. The move seemed to bring out a different type of shopper than the usual one who grabs the "Black Friday" deals, analysts said.

That meant by Friday morning, some shoppers, like Christian Alcantara, 18, at a J.C. Penney Co Inc store in Queens, New York, had already made a lot of their purchases. J.C. Penney stuck to a more traditional 6 a.m. EST (1100 GMT) Friday opening.

"They should open earlier. I've been everywhere else and I've already shopped," he said.

Shoppers like Alcantara are likely to force holdouts like J.C. Penney to move their post-Thanksgiving sales into Thursday night next year, said Liz Ebert, retail lead at consulting firm KPMG LLP.

"There will be pressure on them. There'll be an expansion of it next year," Ebert said.

Hard data on "Black Friday" store traffic will not come in until this weekend. But analysts said retailers who opened early brought in a non-traditional Black Friday shopper, with more families coming in together and buying more than just the "doorbuster" sale items.

"I've never seen parents bring so many kids on Black Friday," Toys R Us Chief Executive Jerry Storch said.

The National Retail Federation expects sales during November and December to rise 4.1 percent this year, below last year's 5.6 percent increase. That made store operators' strategy important as they battled each other, rather than seeing a growing pie in a season when U.S. retailers can make a third of their annual sales and 40 to 50 percent of their profits.

"Retailers want them to buy now, they want to get that share of wallet early," said Michael Appel, a director at consulting firm AlixPartners. He noticed that the Galleria Mall in White Plains, New York, was busy from midnight to 3 a.m., but that traffic, while still brisk, was less heavy by midmorning.

Shoppers used smartphones and tablets and a lot of research as they hit stores, a mobile phenomenon that started last year and seemed to be more prevalent this year.

Thom Blischok, chief retail strategist and a senior executive adviser with Booz & Company's Retail practice, was waiting on line with one woman in Phoenix, who was shopping for a refrigerator. Using her mobile device, she found the appliance online for the same price and left the store without. She intended to buy it online instead.

"There's a fundamental transformation of shopping," he said.

Mobile devices account for 45 percent walmart.com traffic and online traffic coming from Walmart's mobile app was three times bigger than last year, Joel Anderson, chief executive of Walmart.com, said.

Overall, online sales were up 20 percent versus the same period last year, through 3 p.m. EST (2000 GMT) on Friday, IBM said.

The National Retail Federation said 147 million people would shop Friday through Sunday, when deals are at their most eye-catching - down from 152 million the same weekend last year.

The NRF estimate did not account for Thursday shoppers and anecdotal evidence suggested retailers opening earlier may have cut into traffic on "Black Friday", the traditional start of the holiday season that denotes the point when retailers in the past would turn a profit for the year.

"People seemed to be shopping quite a bit, although in talking to mall management, it seemed that traffic was not as busy as last year," Deloitte retail analyst Ramesh Swamy said.

Retailers were also using technology better, allowing sales staff to match prices customers found online and having them use tablets as mobile "checkout stands" so buyers did not have to wait in line, a service consumers were quickly coming to expect.

"I even heard customers complaining about a retailer that didn't have mobile checkout," he said.

Saving up for Christmas spree

According to a Reuters/Ipsos poll, two-thirds of shoppers were planning to spend the same amount of money as last year or were unsure about plans, while 21 percent intended to spend less, and 11 percent planned to spend more.

"I definitely have more money this year," said Amy Balser, 26, at the head of the line outside the Best Buy store in the Mall of America in Bloomington, Minnesota. "I definitely don't think (the economy) has bounced back anywhere near as much as it needs to, but I see some improvement," she said.

For others, Christmas is the focal point of their annual shopping.

"We cut back spending on birthdays and anniversaries so we'd have more for Christmas. We've adapted," said Cheri Albus, 58, of Papillion, Nebraska, after shopping at J.C. Penney at Westroads Mall in Omaha.

Retail stocks rose in holiday-shortened trading on Friday, in line with gains across the market. Among the leaders, Wal-Mart ended up 1.9 percent and Macy's Inc rose 1.8 percent.

Starting early

Across the country, store lines were long - in the hundreds or more in many places - with the move toward earlier opening hours appearing to help. By sunrise on Friday, it was commonplace, even at large stores in the major cities, to find many more staffers than shoppers.

While the shift to earlier openings was criticized by store employees and traditionalists because it pulled people away from families on the U.S. Thanksgiving holiday, many shoppers welcomed the chance to shop before midnight or in the early morning hours.

Some workers used the day to send a message.

OUR Walmart - a coalition of current and former Wal-Mart staff seeking better wages, benefits and working conditions - targeted Black Friday for action across the country after staging protests outside stores for months.

Nine protesters were arrested on misdemeanor charges after blocking a street outside a Walmart near Los Angeles, police said. Three of those arrested were Walmart workers, OUR Walmart said.

Wal-Mart Stores Inc's U.S. discount stores, which have been open on Thanksgiving since 1988, offered some Black Friday deals at 8 p.m. on Thursday and special deals on certain electronics, such as Apple Inc iPads, at 10 p.m.

At the Macy's store in Herald Square in Manhattan, the line at the Estee Lauder counter was four deep shortly after its midnight opening. The cosmetics department's "morning specials" included free high-definition headphones with any fragrance purchase of $75 or more, and a set of six eye shadows for $10.

But for some people, cheap wasn't cheap enough - like the Macy's shopper who bought Calvin Klein shoes at 50 percent off but was still not satisfied.

"I was hoping for deeper discounts," said Melissa Glascow, 35, of Brooklyn, New York.

That could actually be an intentional strategy to help retailers' profits.

"It appears that manufacturers and retailers are making concerted efforts to drive margins, which may take some of the sales sizzle out of a traditionally big selling day/period, but should be positive to gross margins," Credit Suisse analyst Gary Balter said in a note to clients.

Lines at Best Buy stores were similar to last year but the traffic to its website was "significantly" higher, Shawn Score, head of the company's U.S. retail business, told Reuters.

source: interaksyon.com