If you’re reading this then I’m guessing you know much of the history surrounding Cyber Monday. It was a term coined by Shop.org in 2005, signifying the increase of online shopping during the Monday after Thanksgiving break. Since the term was established, we’ve had CyberMonday.com conveniently placed to let us know of impending deals. The site promotes an honorable pursuit with the Ray M. Greenly Scholarship Fund. A scholarship given to students pursuing an e-commerce career.

So, that’s a small piece of history surrounding Cyber Monday but is it still a factor?

Like so many things in life it depends on who you ask. There is a large congregation of people who call Cyber Monday nothing but a myth. Permuto.com claims it’s a marketing ploy for creating a hype with consumers, and driving them to the online retail arena. Their study shows  the Monday after Thanksgiving isn’t close to being the busiest online shopping day of the year. The greatest holiday sales actually occur between December 5th-15th.

The question now remains, if Cyber Monday isn’t the busiest online shopping day of the year then what’s it’s significance? Turning back to Shop.org, their Executive Director Scott Silverman once said, "It was not the biggest day, but it was an opportunity to create some consumer excitement"

Visiting CyberMonday.com it was surprising to see the amount of deals they have posted which have nothing to do with actual Cyber Monday. They’re just deals in the general ‘holiday sense’. The companies who are offering exclusive Cyber Monday deals seem to be smaller online only stores. Amazon.com still doesn’t acknowledge Cyber Monday on their site. Hybrid companies like Best Buy will be offering their Black Friday ‘Doorbuster Deals’ at brick-and-mortar locations along with purchasing online. Wouldn’t that make it Cyber Friday, along with Black Friday?

Throughout my journey in the world of online holiday shopping, I’ve seen nothing that would make me think Cyber Monday is a bigger deal than any other holiday online shopping day. Like so many traditions during the holiday season the truth behind them is a lot less appealing than the perception. However, when marketing online and attracting consumers perception tends to be more important than reality.

Just last week Circuit City announced the closing of 155 stores which meant 155 fewer music stores.  Today the retailer filed for Chapter 11 bankruptcy protection.  According to the Associated Press:

"…the nation’s second-biggest electronics retailer, filed for bankruptcy protection on Monday but plans to stay open for business as the busy holiday shopping season approaches.It filed under Chapter 11 of the bankruptcy code, which will allow it to hold off creditors and continue operations while it develops a reorganization plan. (more)

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If a recession is on the way to the US economy, shoppers didn’t worry about it too much. From November 1 to December 31 of 2007, people spent 19 percent more than they did for the same period in 2006.

A comScore tally of the shopping season found the biggest uptick in spending came as consumers sought video games and accessories. At a gain of 129 percent from 2006, purchases more than doubled while people desperately sought the underproduced Nintendo Wii, as well as competing products from Sony and Microsoft.

Though business was good for the holidays, it could have been better. "Ultimately, the softness in the growth of online retail sales during the first ten days of November proved difficult to overcome and prevented the season’s growth rate from reaching our forecast of 20 percent," comScore Chairman Gian Fulgoni said in a statement.

"However, the period between Thanksgiving and Christmas – another measure of the strength of the holiday season – experienced a healthier 21-percent growth rate."

December 10th, the so-called Green Monday as eBay dubbed it, proved worth its nickname. Buyers plunked down $881 million, followed by $819 million on Tuesday, December 11th. Thursday, December 6th, was the only other day to surpass the $800 million mark, with $803 million flowing to online retailers that day.

Monday, December 10 reached $881 million in sales (up33 percent versus last year), registering as the heaviest online spending day of the season and the heaviest online spending day on record.

"Despite the strong surge in spending we observed at the beginning of last week, with both Monday and Tuesday easily surpassing $800 million in sales and showing very strong growth rates, the remainder of the week saw more modest spending," said comScore Chairman Gian Fulgoni.

"However, we anticipate that spending at the beginning of this week will again be strong with most free shipping deals available until Tuesday, December 18."

This year’s 18-percent online retail spending growth rate is well below the 26-percent rate at the same time last year. An analysis of online spending by household income indicates that slower growth among lower income households is weighing the overall season-to-date growth. Households earning $100,000 have increased their online spending 28 percent versus a year ago, households making less than $50,000 have increased their spending by just 10 percent.

"The current economic realities appear to be having a negative impact on the growth in consumer spending," added Mr. Fulgoni.

"From the sub-prime housing meltdown to a decline in home values to higher gas prices and an uncertain stock market, many consumers across all income segments are either feeling the pinch this holiday season or are lacking the confidence to spend at the rate they had in the past. Consumers in lower income segments appear to be the most affected, as evidenced by the sluggish growth in their rate of online spending."

This month, another survey says that price is the most important factor.

In November, WebProNews’s Mike Sachoff covered Nielsen’s survey, which had overwhelmingly high percentages citing the ability to shop any time and the time-saving aspect as their main reasons for shopping online (81% and 77% respectively).

Ease of comparison shopping was cited by 61 percent.

Low prices was their fifth concern, behind ease of finding the items they sought, with just 46 percent naming low prices as their primary reason for shopping online. Just 24 percent cited low shipping costs.

Nielson Online’s Ken Cassar suggested consumer preferences for convenience spiked during the holiday season, as shoppers sought to avoid crowds at brick-and-mortar locations.

These findings are in sharp contrast to market research firm Synovate of Chicago for Guidance, who says America’s uncertain economy is driving an increase in bargain hunting.

Guidance’s poll suggests the opposite of Nielsen’s, as 67 percent chose price as their first or second most important factor in online shopping (43% 1st, and 24% 2nd), and 59 percent (18% and 41%) of respondents chose free shipping as their first or second choice.

By comparison, only small percentages chose convenience factors like speed/efficiency of checkout (8%) or in-store pickup/returns (3.5%).

Also interesting about this survey is that those with higher incomes (above $75,000 annually) favored special promotions or coupons more often than those from lower income brackets.

So which is it? Price or convenience?

I imagine we could hold our own poll and come up with a third set of numbers. But it may pay off if online retailers can focus on a combination of both to maximize sales.  

When the same respondents were asked to choose their second most important factor, 41 percent said free shipping, and 24 percent named price. Only 8 percent cited special promotions or coupons as the most important factor, 7 percent said recommendations or product reviews, and 4 percent said a speedy checkout is most important. Just 1 percent said that in-store pickup/ returns were the most important factor.

Close to 19 percent of the total sample said they do not make any purchases online (22%of men and 16% of women.) An important finding since all of the 1,000 participants in the survey are online. Those in the highest income brackets were more likely to cite price as their top priority. Fifty-three percent of those earning $50,000 to $75,000 said price was most important, while just 37 percent of those making less than $25,000 agreed.

Concern about price is largely tied to age, the younger the respondent, the more price becomes a factor. Price is most important to those 18-24 (53%) and less important to those 65 and over (30%). Those who are 25 to 34 are the most likely to make a purchase online (only 9% do not). Those over 65 are least likely to buy online, with 30 percent saying they don’t.

"Clearly, the economic climate is driving bargain hunting," said Jason Meugniot, Guidance president and CEO.

"The Internet has opened a vast new world of low-cost purchase options for online buyers. While the online buying experience has improved markedly in recent years, at the end of the day – especially a day of financial uncertainty — price matters."

Ugg, Wii Obsess Holiday Searchers

If and when the Wii game console begins to be produced in sufficient numbers, it will slip from the top of queries made on search engines, especially around the holidays.

For now, analysis firm Hitwise has determined the Wii has been the top item searchers wanted to find, through the week ended December 8th. Uggs and Ugg boots followed it in searcher interest, with the iPod and the Nintendo DS filling in the top five most sought items in search.

Uggs outpaced Coach among luxury items, while Barbie led Build A Bear and American Girl in toys. Searchers apparently committed the unpardonable sin of looking for "Legos" instead of "Lego bricks," the toymaker’s preferred pronunciation of the building toy.

In electronics, everything else chased the Wii. Digital picture frames, Nintendo DS, and Xbox 360 pulled plenty of searcher attention as well.

"Special consoles designed for children are also popular this year, with increased searches for products like the Leapfrog Leapster TV system and the Radica IM Me Wireless Text Messaging device," said Heather Dougherty, director of research at Hitwise.

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Consumer electronics like video game consoles, computers and Mp3 players are popular items this holiday season with the Gen-Y crowd. Fifty-four percent indicated them as the gifts they want most, versus 52 percent in 2006.

Desktop and laptop computers are popular holiday gift items, with Apple and HP as the specific brands at the top of Gen-Y wish lists. Gaming systems trail computers, with the Nintendo Wii being a first choice, followed by the Xbox 360 and then the PlayStation 3. Other popular electronic items include iPods as the most popular Mp3 player, Canon digital camera and iPhones as the most sought after cell phone.

Amazon.com and eBay will see a large amount of Gen-Y Internet traffic, as they will be the two most popular online shopping destinations this holiday season. As a demographic, Gen-Y shoppers are organized and believe in Black Friday with the majority beginning to shop just after Thanksgiving.

"Gen-Y proves time and time again to be the bellwether for up-and-coming consumer trends," said Murtaza Hussain, chief executive officer at Peanut Labs.

"Their choices this holiday season will not only affect their direct spend, but also directly influence the overall family holiday spend. These results should prove intriguing for companies like Apple, HP, Nintendo or Amazon, who top Gen-Y’s list this year."

Online shopper satisfaction increased 1.7 percent to 77.6 on a 100-point scale for the week between December 3 and December 9, 3.3 percent higher than satisfaction for the same week in 2006.

"Customer satisfaction has rebounded to pre-holiday levels, a very encouraging trend for the 2007 holiday shopping season," said Larry Freed, President and CEO of ForeSee Results.

"The combination of retailer readiness for the holiday rush and positive reaction to promotions has resulted in robust satisfaction, which should spell strong results for the holiday season and beyond."

High levels of online shopping satisfaction are leading to the likelihood of purchases being made both online and offline channels, such as in a store or from a catalog. This year online shoppers are 4.6 percent more likely to make a future online purchase and 4.1 percent more likely to make an offline purchase than they were during the same week in 2006.

"The web this year has truly come into its own as an integral channel to drive sales beyond the virtual world," said Freed.

"Retailers have successfully integrated the web into their multi-channel strategy so that it’s a better sales channel and a better tool for increasing store and catalog sales."

Many shoppers who leave a Web site without making a purchase after adding items to their shopping carts plan to make an offline purchase with the retailer.  Compared to last year, shoppers who drop out of the online shopping process are 8 percent more likely to buy offline from the retailer, meaning a sale will still be made.

 The ForeSee Results Holiday Retail Benchmark is produced using the methodology of the University of Michigan’s American Customer Satisfaction Index (ACSI), a proven predictor of future sales (online and offline), word of mouth recommendation and financial performance. Data for this week’s release of the ForeSee Results Holiday Retail Benchmark was collected between December 3 and December 9 from more than 54,000 visitors to 40+ retail websites, including AT&T Wireless; Best Buy; Cabela’s; Danskin; Helzberg Diamonds; Panasonic; Sephora and Toys R Us, among other major retailers.

The promotion was going to end on December 31, 2007. If you’re a Google Adwords customer for every dollar you spend on AdWords, you can process $10 of sales with Google Checkout for free. After that you’ll be charged 2.0% plus $0.20 per transaction no matter what credit card is used. There are no monthly, setup, or gateway fees.

You must link your AdWords account with Checkout to earn free transaction processing. If you add the link by February, 2008, your AdWords spend from January will count towards free processing in February.

Your Checkout and AdWords accounts must be based on the same currency in order to be linked. One nice feature of Checkout is that the fees, when they are charged, are straightforward. PayPal fees depend on your account type, your monthly sales, and whether the buyer is sending money from a bank account or credit card.

Google Checkout is gaining on Paypal when it comes to the top 200 largest online merchants (barely).

Both Paypal and Google Checkout have holiday promotions running. Better hurry though, time is running out.

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