Online sales boom, but merchants want you in mall

Updated: Nov 27 2006, 05:30am hrs
Online merchants have joined forces to create a one-stop shopping destination for the much-hyped Cyber Monday, the ceremonial kickoff to the online holiday shopping season that begins on the Monday after Thanksgiving.

At CyberMonday.com, which is being launched soon, nearly 400 retailers, including Sears and Home Depot, will be posting holiday promotions, such as free shipping and other savings that will be available throughout the holiday season.

The site, created by Mall Networks of Lexington, reflects the growing importance of the internet in holiday shopping.Consumers on average are expected to spend about $800 on holiday shopping this year, and nearly 50% plan to make at least one holiday purchase online, up from 36% three years ago, according to a report last month by the National Retail Federation, a Washington, DC, trade group.

Moreover, customers who shop both online and at bricks-and-mortar stores are more valuable to merchants, spending about 50% more than customers who shop only in stores, said Erika Serow, a retail analyst at Bain & Co.

For the past few years, online retailers have noticed sales on the Monday after Thanksgiving creeping higher, and last year the National Retail Federation began promoting the trend as Cyber Monday.

It was the second-biggest online shopping day of the season, after Dec 12, one of the final days online retailers offered free standard shipping, according to a recent Shop.org/Shopzilla eHoliday Mood study.

When consumers started calling us last year, asking which retailers were offering Cyber Monday promotions, we decided it was time to provide one central location for shoppers to find the best holiday deals, Scott Silverman, Shop.orgs executive director, said in a statement.

Multichannel retailers like Wal-Mart Stores Inc and Macys have recognised the increasing significance of their websites during the holiday season, and have invested heavily to improve them and attract customers to shop both online and in their stores. Sears created a separate website just for the holiday season, called readysetholiday.com, which sells merchandise from the companys three divisionsSears, Kmart, and Lands Endand offers travel tips, mom-to-mom discussion boards, and a kid zone.

Wal-Mart just finished a redesign of its website in time for the holiday season, an effort prompted in part by a growing departure ratepeople who hit the homepage and then leave the website, said

Debbie Kristofferson, a Walmart.coms vice president. We werent meeting customer expectations, Kristofferson said. Our objective is to make it easier to shop and ... to get them to checkout as quickly as possible.

The new design is less cluttered and more prominently features the store location finder. The site also cuts in half the number of clicks needed to complete a purchase. (Its an average of three clicks now.)

The Bentonville, Ark, company expects to have nearly 700 million visits to its website, walmart.com, this year, a 40% increase from 2005. Close to 250 million visits are projected for the holiday season. Television commercials currently promoting Wal-Marts HD televisions tell customers to check out their website, where the company has added an educational section and product comparison features.

Macys, which is investing more than $130 million in its online division over the next two years, expects online sales to reach $1 billion in the next few years.

In general, Macys customers who shop online and at its stores spend about 18 percent more than store-only customers. The company is aiming to make its site more interactive, recently adding the ability for customers to post reviews. More than 14,000 people rated merchandise in the first six weeks.

For the first time, Macys, which has more than 800 department stores, is sending out targeted e-mails this holiday season, promoting sales online and at local stores. The company is also one of the major retailers represented in the CyberMonday.com initiative.

Alyson Anderson, of Retail Concepts, a Norwell consulting firm, described the promotion of Cyber Monday as a smart way to attract attention to cyber shopping, but expressed skepticism about the importance placed on the day.

The truth is that consumers are online everywhere, all the time and do not need to get to the desktop at the office Monday morning to check out something or buy gifts online, Anderson wrote in this months Shop Talk report.

NY Times