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Record Online Holiday Sales Seen as Mobile Drives Growth

Online sales already gained 17 percent on Thanksgiving day, according to research by International Business Machines Corp., signaling shoppers are no longer waiting for the so-called Cyber Monday that follows Black Friday discounts by brick-and-mortar retailers. Photographer: Andrew Harrer/Bloomberg
Online sales already gained 17 percent on Thanksgiving day, according to research by International Business Machines Corp., signaling shoppers are no longer waiting for the so-called Cyber Monday that follows Black Friday discounts by brick-and-mortar retailers. Photographer: Andrew Harrer/Bloomberg

Nov. 26 (Bloomberg) -- Online retailers are poised for a record $43.4 billion holiday sales season as shoppers increasingly rely on social networks and mobile devices to find and buy merchandise.

Internet sales will grow 17 percent from a year earlier and make up more than 10 percent of U.S. retail spending in the last two months of the year, excluding gas, food and cars, said Andrew Lipsman, vice president of industry analysis at ComScore Inc. That compares with $29.2 billion spent online during the same period in 2007, when electronic commerce made up 7.4 percent of total spending.

The growth of smartphones and tablets gives buyers the ability to shop anytime and anywhere, an opportunity that Web retailers have been eager to exploit by offering sales to coincide with traditional storefront deals. The bulk of deals were rolled out today on so-called Cyber Monday, when many retailers marked down items sold online.

“People are shopping on their mobile devices between 7 p.m. and midnight -- that’s an occasion that just didn’t exist in the past, and now we’re seeing it happening in a big way,” Lipsman said.

Retailers are also offering applications to make mobile retailing more seamless while tapping into social media, where shoppers increasingly find and share information on merchandise.

International Business Machines Corp. said Cyber Monday sales had increased 24 percent from last year, as of 12 p.m. in New York, with 22 percent of consumers using a mobile device to visit retailers’ sites.

Moving Online

Sales across, the largest online retailer, had risen 52 percent from the previous year as of 11 a.m. today, according to ChannelAdvisor Inc., which offers services to third-party sellers on e-commerce sites. EBay sales volume has increased 57 percent, the firm said.

EBay began offering mobile-only deals starting at 5:23 p.m. on Thanksgiving -- the exact moment when it expected diners to push away from their pie plates and start scouring the Web. Four days earlier, Inc. debuted a holiday deal site promising bargains to shoppers who used the company’s mobile app or signed up for alerts on social networks such as Facebook Inc. and Twitter Inc.

Online sales already gained 17 percent on Thanksgiving day and 21 percent on Black Friday, according to IBM’s research, signaling shoppers are no longer waiting for Cyber Monday that follows Black Friday discounts by brick-and-mortar retailers. Apple Inc.’s iPad was used for almost 10 percent of online shopping, followed by the iPhone at 8.7 percent, IBM said.

On Black Friday, online sales, excluding EBay and auction sites, surged to more than $1 billion for the first time, according to ComScore. Amazon was the top retailer that day, with more than 57.3 million U.S. visitors, the researcher said.

Mobile Buying

That growth has been driven, in part, by mobile shopping, thanks to smartphones and tablets, along with faster networks, that can deliver a richer Web shopping experience even when away from personal computers and laptops.

“Mobile is a game changer,” said Steve Yankovich, head of mobile business at EBay, the biggest online marketplace. “Consumers expect to shop on their own terms, and tablets and smartphones make every moment instantly shoppable.”

Emarketer Inc. estimates that Web-based sales completed on phones will rise 53 percent in the U.S. this November and December and make up 5.2 percent of Internet buying. By 2015, mobile purchases will contribute 9.5 percent.

Social Shopping

Photo-sharing sites such as Pinterest Inc. that invite users to “like” and share products -- from dress shoes to iron bed frames -- are helping to fuel growth in online sales, Lipsman said. The company has about 25 million users, four times what it had heading into the holiday season last year.

While shoppers still have to leave some social sites to buy items, services like Pinterest -- and more recent copycats such as Svpply Inc. and Thing Daemon Inc.’s -- can turn visitors into buyers by letting them see what their friends and style idols are buying.

“For a long time, we kind of talked about social commerce,” Lipsman said. “People would be making product recommendations on Facebook and Twitter, but what really is starting to hit this theme on the head is Pinterest.”

Almost a quarter of online shoppers take advantage of offers delivered via social media, according to a holiday retail report by American Express Co., the biggest U.S. credit-card issuer by purchases.

CafePress Inc., which sells customized items such as T-shirts and coffee mugs, keeps a close eye on what images, buzzwords and products wax and wane in popularity on social-media websites to decide what to sell.

“All of our content is socially curated, so we have to really watch for what is emerging,” CafePress Chief Executive Officer Bob Marino said in an interview.

Store Showrooming

Shoppers have also developed a habit known as showrooming: inspecting an item in a physical store and then searching online for a lower price. About one third of shoppers do this, according to ComScore.

Showrooming has been made possible by smartphones and tablets, as more people browse the aisles at stores such as Target Corp. and Macy’s Inc. and instantly look up competing online prices.

Compared with last year, holiday shoppers this year are seeking more deals on smartphones, using more applications that scan bar codes for price comparisons and accessing more discounts through mobile apps, according to American Express.

Price Check’s “Price Check” app lets users scan a bar code with a smartphone camera, which then calls up the online retailer’s price. Users can then move the item to a shopping cart or order it on the spot.

EBay rose $2.39, or 4.9 percent, to $51.40 today after reports that Cyber Monday sales are boosting revenue for online retailers, and Amazon rose 1.6 percent to $243.62.

“Not only are consumers spending more online this year, but smartphones and tablets are becoming an incremental driver of growth,” Colin Sebastian, an analyst at Robert W. Baird & Co, said in a note to clients today. “Growth from mobile would disproportionately benefit Amazon and EBay, since their mobile apps tend to be among the most popular and can be used to compare prices easily.”

To contact the reporter on this story: Danielle Kucera in San Francisco at

To contact the editor responsible for this story: Tom Giles at

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