Black Friday, Cyber Monday euphoria: Clicks cannibalize bricks

Black Friday, Cyber Monday euphoria: Clicks cannibalize bricks

Summary: Lofty e-commerce growth figures may just indicate that clicks continue to cannibalize physical retail sales as the consumer spending pie remains static. You inspect at the store and then buy online.

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Stories about Black Friday and Cyber Monday are a dime a dozen today. The solid data points are lining up just like those folks in the queue for that once-in-a-lifetime electronics deal, but there are a few caveats worth noting. It's quite possible that tech sales are just being pushed up and it's unclear how buying behavior will continue through December.

Meanwhile, the lofty growth figures may just indicate that e-commerce is continuing to cannibalize physical retail sales. You inspect at the store and then buy online.

Also: Roundup of Cyber Monday gadget deals

First, the data points---anecdotal and otherwise:

  • Amazon reports that its Kindle family had the best Black Friday ever and the Kindle Fire remains the best selling product on the e-commerce site. File this statement in the anecdotal category since Amazon never coughs up the real unit data.
  • ComScore says that online spending on Black Friday was up 26 percent from a year ago to $816 million. Amazon, Wal-Mart, Best Buy, Target and Apple were the top five retailer properties in order, according to comScore.

  • On Cyber Monday, Shop.org expects 8 out of 10 retailers will run online promotions. Last year, Cyber Monday was the heaviest day of online spending ever with sales topping $1 billion.
  • ShopperTrack reported that Black Friday sales were up 6.6 percent from a year ago based on mall foot traffic.
  • 9to5Mac reports that Apple retail stores sales were "off the charts" based on leaked inventory system data (which was whited out).
  • IBM Coremetrics found that Thanksgiving online shopping was up 39.3 percent from a year ago and Black Friday e-commerce grew at a 24.3 percent clip.
  • CoreMetrics also noted that Apple's iPhone and iPad were ranked No. 1 and No. 2 for mobile device retail traffic at 5.4 percent and 4.8 percent, respectively. PayPal also saw a mobile shopping spike.

So this data indicates it's happy days for the economy right? Not so fast. Promotions for electronics and other goods started earlier and it's likely that sales are just being moved forward. In other words, it's quite possible that Black Friday and Cyber Monday are a big bang and then consumers are done spending.

Piper Jaffray analyst Gene Munster considers the data points mixed. The Chase Paymentech data seems to indicate that sales are being moved up. ChannelAdvisor data puts e-commerce up 17 percent on Thanksgiving, 20 percent on Black Friday and 20.8 percent on Saturday. The ChannelAdvisor data indicates growth is slowing. Munster said:

We continue to believe holiday eCommerce sales are poised to gain share and post a slight acceleration in y/y growth. Overall, the weekend's data was a mixed bag with comScore and the Chase Paymentech pointing towards an acceleration of growth, while ChannelAdvisor saw a slight deceleration growth.

If you zoom out it's possible that we're seeing an ongoing shift to online sales over brick and mortar, but the larger consumer spending pie may not be growing. Not all tech boats will get a lift.

Deutsche Bank analyst Jeetil Patel noted:

We believe accelerating online share gains are being driven by convenience, improved selection, lower cost (no sales tax for most states), and increasing availability of free shipping. Black Friday weekend checks support our thesis that Amazon is positioned to capture a larger share of the online retail market owing to its low prices, large selection and fulfillment expertise. We believe that e-commerce trends will kick into high gear beginning Cyber Monday onward as shoppers convert their store visits over the weekend into online purchases.

Add it up and the initial online commerce data is upbeat, but may not be sustainable through December.

Topics: Browser, Amazon, E-Commerce, Enterprise Software

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15 comments
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  • RE: Black Friday, Cyber Monday euphoria: Clicks cannibalize bricks

    One big factor is the lack of sales tax with on-line buying. In some parts of the US we are talking an extra 10% and that can often be a deciding factor.
    NoAxToGrind
    • RE: Black Friday, Cyber Monday euphoria: Clicks cannibalize bricks

      @NoAxToGrind
      I agree. If the sale tax would be the same, the shipping cost will tilt the balance toward the brick and mortar stores.
      The Linux Geek
  • RE: Black Friday, Cyber Monday euphoria: Clicks cannibalize bricks

    I hope the people spending like crazy this year really can afford their purchases. If they can, these huge gains will be a big help for the economy if not it is just more of the same behavior that got us in this mess and will push us to a 1930s styled apocalypse. My heart wants it to be the first case even though it makes me jealous, my gut tells me its the second case which scares the hell out of me.
    edkollin
    • I'm not concerned

      @edkollin I just spend like crazy then every seven years declare bankruptcy. The government bales me out, yells at me a little, then I start again. its a great country. Thanks US gov't!
      A Gray
      • So you're on the Donald Trump plan...

        @A Gray
        Funny thing about a guy who claims to be a billionaire...how many billionaires have filed for bankruptcy multiple times?
        jasonp@...
    • RE: Black Friday, Cyber Monday euphoria: Clicks cannibalize bricks

      @edkollin people spending are a lot better than government bailouts and 'programs'.
      The Linux Geek
      • RE: Black Friday, Cyber Monday euphoria: Clicks cannibalize bricks

        @The Linux Geek Both bad if they don't have anything to back it up. While people might be morally better it all will lead to Great Depression 2
        edkollin
    • RE: Black Friday, Cyber Monday euphoria: Clicks cannibalize bricks

      @edkollin

      So true, so scary. Why the heck do we feel the need to be so 'discretionary'? No one else does, and we foot the bill in the end.
      TechNickle
  • RE: Black Friday, Cyber Monday euphoria: Clicks cannibalize bricks

    I went to the store and couldn't find what I was looking for, so I bought it online!
    msdamico@...
  • Cannibalize?

    Not as much as you might think. These fads are coming and going so fast now st's nearly impossble to count, let alone keep track of them. The place is being run by the kds rght now; that won't last long as we see over and over again. Even kids grow up eventually and see the light.
    tom@...
    • Not another...

      @tom@...
      "the internet is just a fad" argument. I know more 40- and 50-somethings who do all their holiday shopping online than those who don't.
      jasonp@...
  • I noticed that, generally, on-line prices are higher than in-store prices,

    and I'm regretting not buying that camera that I wanted for my wife, and that HDTV that I wanted for the spare bedroom. I looked both of them up on various cyber-Monday sites, including Amazon and e-Bay and Dell and Best Buy and Wal-Mart, and the prices are higher than they were on black Friday. I'm hoping that, before Xmas day gets here, that those stores will offer their lower prices again.
    adornoe
  • Prices up on CYBER MONDAY vs BLACK FRIDAY

    Maybe the idea is to buy more on BLACK FRIDAY than on CYBER MONDAY...
    Actually you can get prices as low AND even lower on cyber MONDAY than you do on BLACK FRIDAY... You just have to do what I do... SEARCH some on line store for what you want... [notice the similar to what you want links on the pages] & click on those... AND WHAM-BANG.... You find what you are looking for and cheaper than on BLACK FRIDAY...
    The only thing is the location of what you are buying could be in CANADA or in the USA or even [TMART.COM] = HONG-KONG CHINA [but they do ship worldwide for free]
    gkiefferjfk2@...
  • People are buying. That's what really matters.

    It goes against reason, but our economy is based on consumer confidence more than anything tangible. If people buy, layoffs stop. Then the people who kept their jobs buy more and the cycle repeats. Next, companies start hiring and those new workers buy more and even more hiring happens. As unemployment drops, the economy finally grows again. In fact, if you take out job losses due to all the government spending cuts, the unemployment rate has been dropping steadily for many months. Confidence is growing and things really are getting better.
    BillDem
    • Where do you get your "facts" from?

      What's happening out there is the complete opposite of what you "perceive".

      More and more companies are shutting down and/or downsizing, and more and more people are getting laid off as a result.

      Governments have had to cut jobs because they're receiving less tax revenue. When government tax revenue shrinks, it's a direct indication of fewer people in the work force, and with fewer people working, then government tax revenue shrinks

      What Black Friday (and Cyber Monday) sales indicates, is that, more and more people are having to seek out the special low prices that can be had on that day, because, for the most part, they're trying to keep as much money in their pockets as they can in these dire times. To many analysts, the black Friday sales is not a good economic indicator, because, many people will have spent as much as they will for the holiday season on that day. In good times, people didn't have to rush to make special purchase on black Friday, and they took their sweet time to shop and get whatever was appropriate and money was, mostly, not an object. Good black Friday sales might be an indication that, things are a lot worse than they appear.

      Furthermore, when it comes to the actual unemployment rate, 9% is the official government statistic, which doesn't reflect the real unemployment rate. So, the 9% doesn't take into consideration the millions of people who have stopped looking for work, and the millions who are underemployed, and the millions who have had to take on part-time work to simply survive. The fact is that, real unemployment is around the depression levels of the "great depression" of the 1930s, and many economists put the "real" rate at around 20-25%. I personally know a few people, in the family and friends, who are unemployed and are not counted in the official government statistic.

      It's okay to be hopeful, but, it's a lot more important to understand that, the reality is not the same as the perception that many in government would have you believe. If a problem is not recognized and not reported on, then a solution will not be forthcoming.
      adornoe