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A Record-Breaking Week of Online Spending

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A Record-Breaking Week of Online Spending

published on 05.12.2011 in Blog by

As someone who doesn’t take a lot of joy in parking lots that have no parking, shopping aisles that you can’t walk down, and checkout lines that extend halfway to the back of the store, one way that I’ve been able to keep my blood pressure down during the holidays is by going online to shop. And according to comScore, this year I was part of a record-breaking week of online spending.

Last week, which has become known as ‘Cyber Week’, was kicked off by Cyber Monday, the heaviest online shopping day of the year. And this year, Cyber Monday became the heaviest online shopping day in history, reaching a remarkable $1.25 billion in spending, and so far is leading a year of record-breaking days of spending online (I only contributed about $50 to this with my online shopping).

Deals Galore!

Two years ago, when Walmart decided it would extend Cyber Monday into a whole week’s worth of savings, other retailers started taking notice and Cyber Week was born. Now consumers have taken notice, and last week saw three of the four heaviest online shopping days in history. Cyber Monday led the way with $1.25 million. Close behind was Tuesday, November 29, at $1.12 billion, followed by Wednesday, November 30, which reached $1.03 billion, according to comScore.

2011 Holiday Season To Date vs. Corresponding Days* in 2010
Non-Travel (Retail) Spending
Excludes Auctions and Large Corporate Purchases
Total U.S. – Home & Work Locations
Source: comScore, Inc.

Millions ($)
2010 2011 Percent Change
November 1 – December 2 $16,257 $18,697 15%
Thanksgiving Day (Nov. 24) $407 $479 18%
Black Friday (Nov. 25) $648 $816 26%
Thanksgiving Weekend (Nov. 26-27) $886 $1,031 16%
Cyber Monday (Nov. 28) $1,028 $1,251 22%
Week Ending Dec. 2 $5,164 $5,959 15%

*Corresponding days based on corresponding shopping days (November 2 thru December 3, 2010)

So what’s driving this crazy week of online spending? Besides the convenience factor (which is a biggie for me), it’s the wonderful deals and promotions offered by retailers. Consumers can easily comparison shop multiple retailers from the convenience of their home to find the best deals on the items they’re looking for. And as important as the cost savings on the products themselves, is the savings that consumers have come to expect on shipping.

Jumping on the Free Shipping Bandwagon

A Forrester Research survey conducted last year showed that most people abandon shopping carts because of high shipping costs. During the holiday season, the tolerance for high shipping costs is even less, to the point that consumers don’t expect to pay any shipping costs at all. In fact, according to comScore chairman Gian Fulgoni, “more than three-quarters of consumers say that free shipping is important to them when making an online purchase, and nearly half say they will abandon their shopping cart at checkout if they find free shipping is not being offered.”

Retailers have taken notice. This year, according to comScore, free shipping occurred on 63.2% of online transactions.

Weekly Holiday Free Shipping Analysis vs. Corresponding Weeks* in 2010
Non-Travel (Retail) Spending
Excludes Auctions and Large Corporate Purchases
Total U.S. – Home & Work Locations
Source: comScore, Inc.
Week Ending Percentage of Transactions with Free Shipping
2010 2011 Point Change
11/6/2011 41.8% 52.2% +10.4
11/13/2011 44.7% 51.2% +6.5
11/20/2011 50.2% 56.0% +5.8
11/27/2011 55.0% 64.4% +9.4
12/4/2011** 52.2% 63.2% +11.0

While margins become lower for retailers when they offer these shipping deals, average order values from their customers tend to increase, helping to offset those lower margins.

It’s been a good year of holiday consumer spending thus far, and hopefully it continues to break records, even as some of the deals and promotions start to taper off a bit.

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