Cyber Monday is expected to set a New US Record Online Shopping Day but it will also test the limits of retailers’ e-commerce operations.
Target and Amazon.com are pulling out all the stops to get customers’ attention by offering deliveries with no minimum order limits and bombarding shoppers with a slew of promotional emails.
The much-hyped marketing event is expected to bring in more than $3 billion in online, e-commerce sales volume, above the $2.4 billion logged last year, according to Mastercard SpendingPulse that measures total U.S. retail sales across all payment types.
But some of the promotional efforts ahead of the day drew the ire of several people who complained that they woke up to a deluge of cyber Monday emails compared to years past.
“Yes retailers, I’m aware it’s Cyber Monday even without the 150 emails,” tweeted Keina (@RealMamaEagle), a user from Delaware.
Online Splurge Started Thanksgiving
The holiday splurge started last week as Thanksgiving Day Online Retail Sales Jumped 28% from Last Year.
Shoppers not only filled their plates on Thanksgiving day but also their online shopping carts with online spending reaching $3.7 billion, up 28% from last year, according to Adobe Analytics data.
Many customers went online using their mobile devices, with smartphones driving a record 54.4% of traffic on Thanksgiving day, Adobe ADBE, -1.28% said. The devices captured a 36.7% share of revenue.
“While mobile remains strong, retailers have missed out on $4.3 billion in potential revenue from smartphones this season due to cart abandonment,” Adobe said in a report published late Thursday. Adobe posted their final Thanksgiving shopping numbers Friday morning.
These early numbers are on track to confirm Adobe’s forecast that mobile shopping will hit a “landmark” this holiday season. Salesforce.com Inc. took its prediction a step further, saying that this year mobile will “dominate both traffic and orders.”
“Mobile stole the show Thanksgiving day,” said Taylor Schreiner, director of Adobe Digital Insights, in a statement.
Black Friday Results
On Black Friday, Investing.Com reported More U.S. Shoppers Chose the Computer Over the Mall.
The Thanksgiving Day and Black Friday kickoff of the U.S. holiday shopping season showed the increasing preference for online purchases, as more Americans opted to stay home and use their smartphones while sales and traffic at brick-and-mortar stores declined.
The ongoing shift to online shopping has forced retailers across the country to invest heavily in boosting their e-commerce businesses, and also highlights the impact of early holiday promotions and year-round deals on consumer spending.
The weekend also redefined the importance of Black Friday. For the past few years, Black Friday was believed to be waning in importance, but it is now turning into a day when shoppers do not necessarily flock to stores but spend heavily online.
Retail Earnings Growth
In light of the above, here’s an interesting but hardly surprising statistic: Amazon expected to contribute more than half of Q4 earnings growth for S&P 500 retail
Amazon.com Inc.’s fourth-quarter earnings are expected to account for more than half of earnings growth among S&P 500 retailers, according to a report from FactSet.
FactSet expects Amazon to report earnings per share of $5.51, more than double the $2.16 the e-commerce giant reported last year. Amazon beat FactSet earnings expectations the last five quarters.
“Amazon.com is expected to report the highest earnings growth and is expected to be the largest contributor to earnings growth for the Retailing Industry Group and Food & Staples Retailing Industry Group combined,” wrote John Butters, senior earnings analyst at FactSet. “If Amazon were excluded, the estimated earnings growth for Q4 for these two retail industry groups would fall to 6.8% from 15%.”
Sales may be up, don’t expect profits will match. Amazon is pressuring brick-and-mortar profits. As noted last week: Black Friday Shoppers Return, Profits Another Matter.
Mike “Mish” Shedlock
This article was originally published on Mish Talk.
