Tightfisted shoppers love deals? Tell me something I don't know.
Market watcher comScore released some seemingly encouraging e-tail data yesterday. The company projects that online stores rang up $846 million in sales on Cyber Monday, a 15% improvement over last year.
Cyber Monday has become the dot-com equivalent of Black Friday, as potential buyers return to the Web after the Thanksgiving holiday weekend. Since online storefronts know they have a tighter window, given shipping deadlines, putting out choice deals as early as possible is huge.
It's still too early to tell who the winners and losers of Cyber Monday were. Most public companies wait until after the holidays are over to send out their report cards. Bellwether Amazon.com (NASDAQ:AMZN) waits a day or two after Christmas before unwrapping its holiday sales metrics to the public. Those that do talk aren't saying much.
IAC's (NASDAQ:IACI) Shoebuy.com issued a press release to point out that 350,000 visitors hit its footwear-selling site. That is a 30% gain over last year, but where's the shopping data? Did the bump in traffic lead to an increase in sales? Shoebuy isn't telling. The release was more of a self-serving piece to point out how it has $3.5 billion in inventory across 700,000 different products.
The comScore projection is a reflection of actual spending, but that also doesn't tell us much. If e-tailers have to resort to steep markdowns and subsidized shipping to win over buyers -- and that is exactly what appears to be happening this turbulent season -- top-line gains may still result in sharp declines on the bottom line.
Unfortunately for retailers, it seems as if discounting is the key to driving traffic, because nearly every merchant is offering up daily deals to keep bargain hunters coming back.
- High-end jeweler Blue Nile (NASDAQ:NILE) is offering "Daily Gem" markdowns every day between now and Christmas.
- Clearance specialist Overstock.com (NASDAQ:OSTK) is going with a "12 Days of Christmas" theme to its early December markdowns.
- Even Drugstore.com (NASDAQ:DSCM) is diving into the viral pool with its "deal of the day" promotion, complete with a countdown clock that ticks away the seconds on a given day's bargains.
In short, every single day is Cyber Monday this month. Investors had better cross their fingers and hope that the price-tag slicing doesn't mean a lump of coal on the bottom line in a few weeks.
Some other shopping tips:
- The term "Cyber Monday" was coined three years ago.
- Here are 14 shopping strategies for serious bargain hunters.
- It's So Much Worse Than You Think
