For many consumers, online shopping has become one of the easiest and most convenient ways to get their holiday gifts every year. Crowded stores and poor weather are just a couple of the factors that have lessened the appeal of visiting brick-and-mortar businesses.
This year, Cyber Monday falls on November 27 and it is significant for a lot of reasons. Along with Black Friday, it represents the kickoff to the holiday shopping season. It also represents the changing trends in the way people shop online as well as an open marketplace for banks to present their holiday credit card promos, on this day called Cyber Monday credit cards.
Last year marked the first time consumers spent more than a billion dollars just shopping from their phone. Let’s look more closely at the history of Cyber Monday, it’s growth, and why it continues to be important for both consumers and the retail industry.
The weeks leading up to Christmas are huge for retailers. Those high fourth-quarter sales are what allow most retailers to meet their annual sales quotas every year. This, coupled with a surge in credit card applications creates a huge platforms for both retailers and banks to offer their best products to a hungry audience.
And in the early 2000’s, retailers noticed an increase in their online sales. Perhaps it was due to the convenience of online shopping or they may not have been finding what they were looking for in stores. Whatever the reason, online sales continued to increase.
The term “Cyber Monday” was coined in 2005 by a division of the National Retail Foundation. A press release from its Shop.org unit stated that 77 percent of online retailers observed a growing trend in which their online sales increased dramatically the Monday after Thanksgiving. Hence, the term Cyber Monday was born.
This press release was designed to provide online retailers with the same excitement that Black Friday shoppers experienced. Black Friday was such a popular tradition with many consumers shopping through the weekend and into the following week.
But why the Monday after Thanksgiving as opposed to Saturday or Sunday? It has been speculated that the reason was that at that time, many consumers only had access to high-speed internet at work. Thus, their online shopping spree began on their first day back at work after the long weekend.
Hence, the idea of Cyber Monday was born and the media seized on it in a big way. Online retailers saw a boost in their sales, largely thanks to the free promotions from the media.
Cyber Monday has not only continued to see increased online sales but online shopping itself has continued to increase over the holiday season.
In 2005, Cyber Monday hit $484 million.
This figure increased by 25 percent in 2006, bringing sales up to $610 million.
In 2007, it grew another 21 percent and reached $733 million in sales.
There was a brief lull in sales in 2009, likely due to the financial crisis; Cyber Monday grew by a mere 5 percent and reached $846 million.
But by 2010 sales increased by 16 percent and it officially hit the billion dollar mark.
This trend has continued to increase and the holiday surpassed $3 billion in 2015.
So why has Cyber Monday continued to grow so steadily over the past decade? Increasingly, the driving reason seems to be the convenience factor.
Instead of having to go spend their entire holiday weekend driving around town to different stores, consumers could shop online at their own convenience. Some of the biggest reasons most consumers prefer online shopping are discounted prices, free shipping, and better product availability.
Every year, retailers scamper to see who can announce their holiday deals the earliest. Over the past few years, Black Friday and Cyber Monday have slowly blended together to become one big week of shopping.
And now that most consumers have access to the internet both at home and on their mobile phones, shouldn’t Cyber Monday be losing some of its steam?
According to the data, Cyber Monday remains as a strong as ever. And one study even claimed that it’s now more popular than Black Friday.
This year, 42 percent of holiday shoppers plan to shop online for more than half of their holiday budget. And 75 percent of consumers aged 18 to 34-years-old plan to visit stores but only so they can buy them online at a later date. And the biggest online retailers for 2017 are Amazon, Walmart, and Target.
Retailers and credit card issuers have a lot to gain from Cyber Monday. These types of “one-day only” sales event create a sense of urgency in the minds of consumers. And consumers are incentivized to spend more than they normally would because they feel like they are getting a better deal. This especially holds true with Cyber Monday credit card bonuses because they are typically short term promotions.
Plus, the high sales volume creates scenarios where retailers are close to selling out various items. This means consumers have to act fast or they may miss out on the deal altogether.
Retailers can take advantage of the additional web traffic by offering deals on less popular products. This gives retailers the opportunity to move more inventory.
They can also offer additional incentives to obtain customer’s email addresses and other customer information. And they can even offer better deals to customers who are willing to open co-branded store credit cards.
This provides stores with additional customer data and market research. It will also lead to continued business even after Cyber Monday is over.
Since it began in 2005, Cyber Monday has become one of the most profitable days of the year, surpassing even Black Friday. And it continues to be one of the busiest days of the entire year for retailers.
Cyber Monday benefits both consumers and retailers -- consumers can take advantage of the low prices from the comfort of their own home. Meanwhile, retailers can benefit from the increased sales and customer information.
Of course, it remains to be seen what will happen on Cyber Monday this year. But if the past decade is any indication, it will likely be the biggest Cyber Monday yet.