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Cyber Monday is losing its luster for online retailers

As more homes get high-speed Internet access, fewer people use their work computers the Monday after Thanksgiving for holiday shopping. Still, many merchants will be offering promotions and specials.

November 26, 2009|By Alex Pham

As long as there has been online shopping, there has been Cyber Monday. But is that now more virtual than real?

Online retailers for the last decade have counted on the Monday after Thanksgiving to deliver for them what Black Friday does for bricks-and-mortar stores: a turbo boost into the holiday shopping season. Online sales surged on that Monday as many people hopped on to their employers' fast Internet connections to do some holiday shopping when they returned to work after Thanksgiving.

But with more than 60% of U.S. homes now sporting high-speed Internet access, more people are now flipping through those online catalogs at home, said Ken Cassar, vice president of Nielsen Co.'s online research division.

As a result, more online stores aren't waiting until Monday to get the party going. They're throwing their own Black Friday events. Some, including Amazon.com Inc., are doing deals every day this week.

That doesn't mean Cyber Monday will fade away, however. That's because some people still shop at work, away from the prying eyes of family members.

It's now become more of a marketing hook that retailers want to keep alive.

"Retailers liked the marketing focus," Cassar said. "It remains a big shopping day, but it's now fueled more by retailer marketing and promotion."

More merchants say they plan to offer some type of promotion, such as free shipping or extra discounts, on Monday, 87% compared with 83% last year, according to a survey by Shop.org, the online division of the National Retail Federation. Shop.org has a Web page listing Cyber Monday specials offered by 650 of its member merchants.

The shipping promotions will probably come with fewer strings, said Scott Silverman, Shop.org's executive director. Half of the online merchants planning to toss out the shipping charges said they would not impose conditions, such as minimum order amounts, up from 25% of retailers in 2005.

Whether that will help lift online retail sales this holiday is up for debate. Shop.org, whose members tend to be bigger merchants, said a survey of 60 retailers showed 70% of respondents expected online sales to grow this holiday over last year.

But Cassar expects sales to be flat this holiday after falling 6% last year. "There is high optimism among larger retailers," he said, "but very low optimism among smaller online retailers, who tend to struggle more."

A Nielsen survey found that 63% of people are planning to buy online this holiday, compared with 71% last year. Of those planning to shop online, 31% said they planned to spend more than $300, down from 42% last year.

Research firm ComScore, which tracks online spending, is projecting a paltry 3% growth in holiday spending online, to $28.8 billion from $28 billion last year. From Nov. 1 through Sunday, online sales ticked up just 2%, compared with a 4% decline in the same period last year.

"Online spending this holiday season will likely be tempered by the stark reality of 10% unemployment and less disposable income in many consumers' wallets," ComScore Chairman Gian Fulgoni said.

alex.pham@latimes.com

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