Black Friday sales online top $1B for first time: comScore

Black Friday retail sales online this year topped $1 billion for the first time ever as more consumers used the Internet do their early holiday shopping, comScore Inc said on Sunday.

Online sales jumped 26 per cent on Black Friday to $1.04 billion from sales of $816 million on the corresponding day last year, according to comScore data.

Amazon.com was the most-visited retail website on Black Friday, and it also posted the highest year-over-year visitor growth rate among the top five retailers. Wal-Mart Stores Inc's website was second, followed by sites run by Best Buy Co., Target Corp. and Apple Inc, comScore noted.

Digital content and subscriptions, including e-books, digital music and video, was the fastest-growing retail category online, with sales up 29 per cent versus Black Friday last year, according to comScore data.

E-commerce accounts for less than 10 per cent of consumer spending in the United States. However, it is growing much faster than bricks-and-mortar retail as shoppers are lured by low prices, convenience, faster shipping and wide selection.

ShopperTrak, which counts foot traffic in physical retail stores, estimated Black Friday sales at $11.2 billion, down 1.8 per cent from the same day last year.

"Online has been around 9 per cent of total holiday sales, but it could breach 10 per cent for the first time this season," said Scot Wingo, chief executive of ChannelAdvisor, which helps merchants sell more on websites, including Amazon.com and eBay.com.

ComScore expects online retail spending to rise 17 per cent to $43.4 billion through the whole holiday season. That is above the 15 per cent increase last season and ahead of the retail industry's expectation for a 4.1 per cent increase in overall spending this holiday.

Cyber Monday outlook

It's not clear yet whether strong Black Friday sales online will weaken growth on Cyber Monday, which has been the biggest e-commerce day in the United States in recent years.

"Cyber Monday will be a big day, but not as much of a big day as it has been in the past," said Mia Shernoff, executive vice president for Chase Paymentech, a payment-processing unit of J.P. Morgan Chase & Co.. "Faster broadband Internet connections in the office used to drive this. But now many consumers have faster connections at home and smart phones and tablets - they don't have to wait."

ComScore Chairman Gian Fulgoni said Cyber Monday online sales may reach $1.5 billion this year. That would be up 20 per cent from the corresponding day last year - slower year-over-year growth than Thanksgiving and Black Friday.

More than 129 million Americans plan to shop online on Cyber Monday, up from almost 123 million on the same day last year, according to a survey conducted in recent days for the National Retail Federation.

The group also expects 85 per cent of retailers to have a special promotion for Cyber Monday.

Amazon, the world's largest Internet retailer, will launch Cyber Monday deals at midnight on Sunday. The company is planning a limited time Cyber Monday promotion for its 7 inch Kindle Fire tablet, offering it at $129 instead of the regular $159, a spokesman said on Sunday.

Mobile shopping growth

A big source of online shopping growth this holiday season has come from increased use of smart phones, which let people buy online even when they are in physical stores, and by tablet computers, which have spurred more online shopping in the evenings, Wingo and others said.

Mobile devices accounted for 26 per cent of visits to retail websites and 16 per cent of purchases on Black Friday. That was up from 18.1 per cent and 10.3 per cent, respectively, on the same day last year, according to International Business Machines, which analyzes online traffic and transactions from 500 US retailers.

More than 20 million shoppers plan to use mobile devices on Cyber Monday, up from 17.8 million a year ago, the NRF said.

Amazon and eBay

Amazon and eBay benefit from increased use of mobile devices for shopping because they are consistently the top two online retail destinations for mobile users, ChannelAdvisor's Wingo said.

Amazon.com was the most visited retail website on Black Friday, with more than 28 million visits, according to Hitwise.

Worth noting: eBay runs one of the largest online marketplaces, rather than being a retailer, so its online traffic was not reported by Hitwise. However, eBay said the volume of mobile transactions on its marketplace jumped 153 per cent on Black Friday from a year earlier.

ChannelAdvisor clients' same-store sales on Amazon.com shot up 43 per cent on Saturday, compared with a year earlier. Last year's year-over-year growth was 49 per cent on the Saturday following Black Friday.

Client same-store sales on eBay's marketplace rose 36 per cent on Saturday, compared with a year earlier. Last year's year-over-year growth was 12 per cent, according to ChannelAdvisor.

Price pressure

While mobile devices may be good for sales, they may not be so good for retail profit margins. Smart phones give shoppers real-time access to product prices online, potentially exacerbating the usual holiday discounting and price wars.

Black Friday online transactions jumped almost 30 per cent, but the average ticket price was down more than 11 per cent, according to Chase Paymentech, which reports data from its 50 largest e-commerce merchant clients.

"It's driving prices down," Shernoff said. "Consumers are checking prices in stores and showing the retailer, and the retailer will succumb to the lowest price online so they don't lose the consumer."

Online shopping grows after US holiday store traffic ebbs

Internet sales continued to grow through the US Thanksgiving holiday weekend, feeding overall transactions even as traffic to stores likely slowed after a strong, early start.

In the latest sign of the growing importance of Internet-based retailing, comScore Inc said "Black Friday" online sales topped $1 billion for the first time, while IBM said online sales rose 16.9 per cent year-over-year on Saturday.

Staying open on Thanksgiving became more widespread this year as retailers such as Target Corp, Sears Holdings Corp and Toys R Us Inc joined in, while others including Wal-Mart and Gap Inc either extended their operating hours or had more stores doing business.

Traditionally, stores had waited until Black Friday, the day after the US Thanksgiving holiday, to make their big push.

IBM, in a survey, said 24 per cent of shoppers used a mobile device to visit a retailer's website on Black Friday, and 25.5 per cent did so on Saturday. Overall sales, however, were likely to have flattened slightly.

The number of consumers using their mobile device to make a purchase was up over Black Friday, reaching 16.7 per cent versus 16.3 per cent, IBM said.

"Overall Saturday sales are probably up 1 or 2 per cent after the 3 or 4 per cent on Thursday and Friday," said Steve Krenzer, chief executive of shopping comparison website PriceGrabber.

"Sales for the overall weekend will be up 3 per cent, but some of Thursday and Friday's gains will come at Saturday's expense," he said.

Krenzer said that this year, 13-14 per cent of consumers indicated they would spend more this holiday season against 80 per cent or more who said they would spend the same or less than last year.

"When you see strong sales on Thursday and Friday, you know it is going to come from later in the weekend or later in the season," he added.

Consumer spending accounts for about 70 per cent of US economic activity.

Hard data for sales and traffic trends for the weekend will not be available until later in the day and week, but initial readings suggested that for all the early Thanksgiving deals, those extra hours may not have led to a huge boost in sales.

The National Retail Federation expects sales in November and December to rise 4.1 per cent this year, below last year's 5.6 per cent increase.

As the spending pool contracts, it becomes more important for retailers to strategize as they battle each other, rather than seeing a growing pie in a season when they can make a third of their annual sales and 40 to 50 per cent of their profits.

"The early opening is very important to gain or maintain market share in the competitive landscape, but it will not generate a breakthrough spike in year-over-year spending for the overall holidays," PriceGrabber's Krenzer said.

Analysts at Shoppertrak, which analyzes store traffic, said though the number of shoppers visiting physical stores rose 3.5 per cent on Black Friday, retail sales fell 1.8 per cent that day.