Cyber Monday sales surge as buyers pick Amazon over stores

Cyber Monday sales surged, sending online shopping toward a single-day record as Amazon.com Inc. and EBay Inc. siphoned consumers from brick-and-mortar stores.

Web sales yesterday rose 21% from 2012, International Business Machines Corp. said in a statement. Retailers catering to smartphone and tablet users benefited the most, with mobile traffic accounting for 32% of site visits, a 45% gain from a year earlier.

E-commerce is projected to be the bright spot of an otherwise tepid holiday season marked by the first Black Friday- weekend spending decline since 2009. While Internet sales may climb as much as 15%, more than three times faster than overall retail growth, they still account for just 14% of the total, according to the National Retail Federation.

“The results thus far from an e-commerce perspective have been very strong -- certainly strong relative to brick-and- mortar stores,” Ron Josey, an analyst at JMP Securities Inc. in New York, said in an interview. “This is the first holiday season where mobile is absolutely having its mark on overall retail sales, whether that’s from a smartphone or a tablet. It’s not going away.”

Online spending increased 15% to a record $1.2 billion on Black Friday, according to research by ComScore Inc. Still, because of the in-store slump, total purchases fell 2.9% to $57.4 billion during the four days beginning with the Nov. 28 Thanksgiving holiday, according to a survey commissioned by the National Retail Federation.

Holiday Angst

The results reinforced declining investor optimism about U.S. holiday sales, as signaled by the performance of two small- cap stock groups. The Russell 2000 Consumer Discretionary Index has trailed the Russell 2000 Consumer Staples Index by 1.7 percentage points since Nov. 25, reversing almost a third of its relative gains during the prior two months.

The performance of these indexes in the past week shows investors are less sanguine about the U.S. holiday season, said Tim Ghriskey, chief investment officer at Solaris Group LLC in Bedford Hills, New York, which manages over $1.5 billion.

Amazon, based in Seattle, fell 2.2% to $383.99 at 2:18 p.m. in New York, while EBay gained 0.9% to $51.82.

Internet sales may climb to $82 billion in the holiday season, more than three times faster than total retail growth of 3.9% to $602.1 billion, according to the NRF.

Visa Inc., the world’s biggest bank-card network, said U.S. cardholders spent $7.8 billion from Thanksgiving through yesterday, a 30% increase. On Cyber Monday, Visa customers spent $2.6 billion, up 28% from a year earlier and the most of any day during that span.

Mobile Sales

In terms of sales, mobile devices drove more than 17% of online purchases on Cyber Monday, IBM said.

Online retailers are catering to consumers such as Camille Schmidt, 25, who owns a public relations company and primarily shops on the Web. Schmidt scanned her e-mail for big discount headlines yesterday morning and allotted time to shop after work in the evening. She ended spending $600 total, including a black Erin Fetherston dress for about $175.

“I’m looking for the highest percentage discount,” she said in an interview, noting that she had been eyeing a coupon for 40% off at Juicy Couture that landed in her inbox. “I usually know what I want, and they’re usually designer brands. I’m just waiting to see how far they’ll go.”

Online Discounts

Amazon lured consumers with deals such as half off Mattel and Fisher-Price products, 46% off a Canon digital camera and 65% off men and women’s cashmere. EBay, based in San Jose, California, had similar discount offers, like more than 80% off diamond stud earrings. Physical stores with websites followed suit. J. Crew Group Inc.’s Madewell offered 25% off all merchandise and free shipping.

Amazon’s Cyber Monday same-store sales jumped 46% from last year, while EBay’s climbed 32%, according to ChannelAdvisor Corp., which provides services to sellers on both of those sites. Cyber Monday was most likely EBay’s biggest shopping day this season, the company said.

“Cyber Monday has been the single biggest shopping day of the year for U.S. retailers for a number of years now,” said Sucharita Mulpuru, an analyst at Forrester. “The big story is that stores continue to lose share and web retailers continue to gain share.”

Buying Patterns

Shopping on tablets and smartphones increased twice as fast in the third quarter as desktop online spending, boding well for the holiday season, according to ComScore. Web users in August spent more time engaging with retailers on mobile devices than on desktops for the first time, the firm said. EBay’s PayPal unit said in a statement that mobile payment volume more than doubled as of 2 p.m. New York time yesterday compared with a year earlier.

Buying patterns on mobile devices since Thanksgiving have shown that tablets are more popular for purchases, while mobile phones are preferred for browsing. Tablets accounted for 12% of purchases, compared with 5.5% from smartphones, IBM said. Consumers also dished out more cash when buying on tablets, spending an average of $126.30 per order, compared with $106.49 for smartphones, the company said.

“Consumers continue to expect to shop and pay at their convenience during the holiday season,” said Stacy General, a customer experience advocate for PayPal.

Many retailers are also subsidizing shipping over the holidays to compete with Amazon’s discounted two-day service and plans for Sunday delivery, which has couriers projecting higher shipping volumes.

The U.S. Postal Service expects to ship 420 million packages during the 2013 holiday season, an increase of about 12% from last year. United Parcel Service Inc. said it expected to pick up 32 million packages on Cyber Monday, an increase of 10%.

“Online sales growth continues at a much faster clip than overall retail sales,” said Alan Gershenhorn, UPS’s chief sales and marketing officer. “We experienced some nice results this weekend.”

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