Very Merry E-Tailing

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While the bricks-and-mortar world was reading the tea leaves of a mixed "Black Friday" -- the day after Thanksgiving and traditionally retailers' busiest -- the online world's big holiday weekend wasn't over yet. It was still watching traffic and crossing its fingers, waiting to dissect its own bellwether day: Black Monday.
VeriSign (VRSN) in Mountain View, Calif., which processes about 35% of all online transactions, says Black Monday has been its busiest day of every year since it started tracking the figures in 2001. In the last two years, Black Monday traffic has been nearly double that of Black Friday. And many were bullish about prospects for this year's Black Monday, given that Black Friday registered boosts in online-shopping traffic.
SHOPPING AT WORK. However, it's debatable whether the Monday after Thanksgiving is the biggest online-buying day. New York-based Nielsen/Net Ratings, which follows only home Internet traffic going to online stores, calls the Sunday after Thanksgiving typically its biggest day of the season. And Shopping.com (SHOP) says while Black Monday outdoes any day of the Thanksgiving weekend, it rates the following two Mondays even stronger.
Still, there's no denying Black Monday increasingly is a strong indicator of how the season will go. The thinking behind a blockbuster Black Monday is that people shop at "real" stores on the weekend or are engaged in festive family activities. Come Monday, they find themselves back at work -- and most likely in front of a computer with a high-speed Internet connection. According to several research groups, work has long been the favorite place to shop online. Lest bosses be too worried about productivity, VeriSign says its traffic usually peaks from lunchtime on the East Coast to the end of lunch out West.
According to Nielsen/Net Ratings, more than 13 million people shopped -- although not necessarily bought -- online on Friday, Nov. 26. Research firm comScore Networks, in Reston, Va., says Web retailers raked in $250 million on Black Friday, and it expects the numbers for Monday to be even higher -- and better than the $300 million done on Black Monday, 2003.
DOUBLE-DIGIT BOOST. Shopping.com predicts that Monday will prove to be the biggest traffic day in its five-year history, says Rob Goldman, its vice-president for business intelligence. "We expect Monday to be 25% ahead of Black Friday," he says. Shopping.com had 702,000 visitors on Friday, according to Nielsen/Net Ratings, ranking it No. 7 in online-shopping traffic.
Moreover, it already looks like online retailers will have a very cheery holiday season for 2004. Sales are expected to increase about 20%, to $13 billion, according to forecasts by New York-based Jupiter Research. That's not as good as the 31% year-over-year increase seen in 2003. But it's still significantly better than the single-digit increases expected in the offline world, where estimates range from 4% to 6%.
Online traffic was up 11% on Black Friday, according to Nielsen, while comScore Networks says holiday spending online was up 23% through Friday. The biggest winners: eBay (EBAY), with 5.4 million users; Amazon.com (AMZN), 2.6 million; and Wal-Mart (WMT), 1.4 million. Wal-Mart also experienced the biggest jump in traffic, with a 61% increase over last year, vs. flat to 13% increases for the rest of the top five, according to Ken Cassar, analyst at Nielsen/NetRatings.
ROOM TO GROW. Wal-Mart's big online jump has industry watchers scratching their heads since the behemoth's offline sales were a disappointment (see BW Online, 11/30/04, "Retailers Revel in Those Jingling Bells"). The two likely aren't linked, according to Patrice Duker, spokeswoman at the trade group International Council of Shopping Centers in New York. "Online shopping overall is still only 1.4% of all retail sales," she points out, and industry estimates put it at 6% of holiday sales.
Those percentages may seem puny, but they underscore online shopping's vast growth potential. In the here and now, however, signs point to a bright holiday for e-tailers.