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Cyber Monday on track for U.S. online shopping record

TechnologyNov 26, 2018 10:29PM ET
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© Reuters. Packaged merchandise on a conveyer belt is labeled for shipping at the Amazon fulfillment center in Robbinsville

By Siddharth Cavale

(Reuters) - Cyber Monday was on track to bring in a record $7.9 billion in U.S. online sales, as millions of shoppers scoured for steep discounts on everything from Lego sets to big-screen TVs.

The marketing event was picking up steam Monday evening as West Coast shoppers looked for deals after work and those on the East Coast made purchases before bedtime, according to Adobe (NASDAQ:ADBE) Analytics, which measures transactions from 80 of the top 100 U.S. retailers.

A late evening forecast from Adobe estimated sales would be $100 million more than it had expected earlier in the day.

"Many shoppers have waited on certain purchases, with three hours tonight expected to bring in as much revenue as an average full day," said Taylor Schreiner, director of Adobe Digital Insights.

Target Corp (NYSE:TGT) and Amazon.com Inc (NASDAQ:AMZN) were pulling out all the stops, offering free delivery with no minimum order requirement and bombarding shoppers with promotional emails.

Companies' sales were up 20 percent from a year earlier as of 7 p.m. ET, including a surge in orders placed via mobile phones, Adobe Analytics found.

On Wall Street, investors showed their enthusiasm. Shares of Amazon closed up 5 percent. Macy's Inc, Kohls Corp and Target shares rose as well.

In another estimate, Mastercard (NYSE:MA) SpendingPulse forecast a 25 percent jump in e-commerce sales to at least $3 billion, based on sales via the Mastercard payments network and estimates for other payment forms such as cash and check.

These U.S. forecasts still paled in comparison to Alibaba (NYSE:BABA) Group Holding Ltd's "Singles Day" earlier this month, when the Chinese e-commerce giant raked in $30.7 billion in sales.

Some industry observers saw a down side to the U.S. shopping frenzy.

Bob Phibbs, chief executive of New York-based consultancy the Retail Doctor, warned of potential store closures if brick-and-mortar players discounted items too heavily this holiday season.

"Online discounts and free shipping are significantly cutting into retailers' profits," he said. "Retailers are just spending money in the hopes that they don't lose too much more."

The promotional efforts also drew the ire of customers who complained they woke up to even more Cyber Monday emails than in years past.

"Yes retailers, I'm aware it's Cyber Monday even without the 150 emails," tweeted Keina (@RealMamaEagle), a user from Delaware.

DEEP DISCOUNTS ON TOYS

Drawing an estimated 75 million shoppers, the day was a test of retailers' online platforms and delivery operations.

Without the right IT infrastructure, the heavy traffic could have caused hours of glitches like those during Amazon's Prime Day marketing event in July.

But as of 10:00 p.m. ET on Monday, no big U.S. chain had notable technical difficulties, according to outage tracker DownDetector.com. On Black Friday some websites including apparel retailer J.Crew and home improvement chain Lowe's Cos Inc had temporary outages.

Consumers are increasingly doing their holiday shopping online, diluting the importance of Black Friday, when shoppers traditionally flocked to brick-and-mortar stores for the best deals.

Adobe said the nationwide average shopping basket was $138 so far for Cyber Monday, up 6 percent from last year.

"I find Cyber Monday to be more convenient than Black Friday," said Jeissy Casilla, 23, a retail worker in Puerto Rico. "I think that Cyber Monday is better in terms of how much you can get done while doing so little - basically a better chance at the best deals."

Toys were expected to have the biggest discounts, Adobe Analytics said, as retailers rush to fill the void left by the bankruptcy of top U.S. toy retailer Toys 'R' Us.

Target offered 30 percent off on select toys, while Kohl's discounted Lego sets between 30 percent and 40 percent.

"This year, retailers are much clearer about where their strengths lie, rather than just attempting to beat Amazon at its own game," said retail analyst Carol Spieckerman.

Social media conversation tracker Brandwatch said out of 13,000 social media mentions of #Cybermonday, the Apple (NASDAQ:AAPL) Watch and the Red Dead Redemption 2 video game were two products that were highly discussed.

The National Retail Federation forecast U.S. holiday retail sales, including online, in November and December will increase between 4.3 percent and 4.8 percent over 2017, for a total of $717.45 billion to $720.89 billion.

Cyber Monday on track for U.S. online shopping record
 

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