Can you hear it? That's the sound of desperation. Despite record-breaking numbers from the start of the Christmas shopping season, retailers appear fearful that the spending boom they enjoyed over Thanksgiving weekend is already starting to fade, so they're trying to extend the feel-good feelings by offering up new "cyber" deals.
Although Home Depot (HD 0.74%) and VistaPrint (CMPR -1.39%) are both touting that "Cyber Monday is back," that's really just the latest salvo of retailers trying to maintain a hold on the attention of consumers. Last week, Wal-Mart (WMT 0.46%), Amazon.com (AMZN -2.56%), and Target (TGT 1.03%) all offered "Cyber Week" deals. No longer is it just Cyber Monday, but rather it's cyber-all-the-time.
A cyber feast
The numbers that came in last weekend were very good. While typical Cyber Monday sales were huge -- $1.5 billion, the most ever -- the market researchers at comScore (SCOR -5.37%) online sales made on Thanksgiving Day itself hit a record, jumping 32% to $633 million. eBay (EBAY 0.88%) apparently enjoyed what might be called Black Cyber Sunday as that became it's biggest mobile shopping day with transacted volumes surpassing both Black Friday and Cyber Monday .
In fact, Cyber Monday might have been something of a disappointment for everyone, since some analysts thought sales would surpass the $2 billion mark. Although the actual numbers weren't too shabby by themselves, coming in as they did 17% higher than the year-ago period, retailers just might be pulling their sales forward putting them at risk of stumbling and coming up short in the final weeks of the season.
Pushing the plate away
The National Retail Federation says the entire weekend shopping event was one big record-breaking event, with $59.1 billion spent online and at stores, and now retailers want to make sure that spending spree doesn't stop now.
Even so, November's total sales were exceptionally weak, even when including the cyber-day or -week sales, and many companies are now worried they won't be able to make up the difference. Analysts had expected a 3.3% jump in monthly sales data, but instead they came in light, up just 1.6%. While there were the lingering effects from superstorm Sandy that weighed down results, retailers across the board felt the impact. Mid-tier chains such as Kohl's (KSS 1.49%) and Macy's (M -2.68%) recorded disappointing November sales, as did luxury-goods sellers such as Tiffany (TIF) and Nordstorm (JWN 0.96%).
Which is why we're seeing them push the envelope on when cyber deal-making will end. From the looks of it, that's going to be never.
Sales today, sales tomorrow
Non-stop sales present an additional dilemma for bricks-and-mortar retailers that run the risk of cannibalizing sales by being too promotional, such that they steal sales from their physical stores. And offering up prolonged periods of deal-making only serves to pressure profits, squeezing margins that are already flagging.
In politics, they talk about the never-ending campaign; in retail we're looking at a period of never-ending sales. With retailers typically making 40% of their annual sales on the Black Friday weekend, that could indeed be the high point of the shopping silly season, meaning there won't be as much holiday cheer as you'd normally expect come Christmas.
