National Retail Federation's Scott Silverman on Cyber Monday Trends
Three years ago, after research firms, media outlets and others started reporting on the trend of online sales spikes occurring the Monday following Thanksgiving, Shop.org, the digital division of the National Retail Federation, coined the day "Cyber Monday." Since then, Cyber Monday has become a focus for marketers, consumers and the media—all trying to get a handle on the role this period plays in the holiday sales season.
Target Marketing caught up with Scott Silverman, executive director of the National Retail Federation, to get a sense of how this year's Cyber Monday turned out, as well as what that performance could mean to marketers this year and looking forward to 2009's Cyber Monday.
Target Marketing: How has Cyber Monday grown since Shop.org coined the term three years ago?
Scott Silverman: The biggest way that it's grown is in how retailers are using Cyber Monday as a promotion tool. Because this term didn't exist in any major way in 2004, it kind of started at zero. We saw that 84 percent of retailers in 2008 were offering Cyber Monday promotions.
TM: Do Cyber Monday sales and shopping patterns help predict the rest of the holiday sales season?
SS: If you look at comScore's data, it does seem to indicate that there has been a pattern where Cyber Monday has been able to predict some of the overall holiday sales season. However, I think there haven't been enough years under the belt ... Cyber Monday is too volatile a term because it's so new. In 2006, it was much less known than it was in 2008.
And this year, "unprecedented" is pretty much the only way to describe where we are right now with the economy. So you could make a strong argument that Cyber Monday was an outlet for a lot of pent-up demand among consumers, and things could drop off after Cyber Monday. We'll have to find out. They certainly picked up on Cyber Monday relative to October and November [sales].
TM: What promotions were most popular this Cyber Monday, and is that a change from years past?
SS: Free shipping is a big Cyber Monday promotion, and that's been a continuation from the last couple of years. And just calling it a "Cyber Monday" sale or using "Cyber Monday" as a way of describing the promotion, we've seen that grow over the past couple years.
TM: What aspects of Cyber Monday should marketers study to better prepare for this important selling period?
SS: Unrelated to Cyber Monday, one thing marketers should study is how the Internet can be used for Black Friday more. My instinct tells me that it's being underutilized [with regard to] e-mail and search engine marketing.
And I think trying to get into the head of the consumer and understand how important Cyber Monday is to them, what their expectations are ... If retailers were successful in meeting expectations, what did they do that allowed them to meet expectations because that's not an easy thing to do. [They should] understand that, and do more of it.
And also, margin is always important. So retailers should study what would happen if they didn't have that sale, if they didn't offer free shipping. Would they be more profitable? I'd venture to guess that they would see a lower volume in sales, but they may be able to be more profitable at the end of the day. Of course, then also if there's lower volume, that affects their inventory—so I think there's a lot of things to study. And that's not just for Cyber Monday. I think that's for any holiday that creates an opportunity for promotions and discounts.
TM: And what about Shop.org's Cyber Monday Web site, which promotes offers from major retailers and raises funds for scholarships?
SS: It's been growing vigorously. We had a million and a half visitors on Cyber Monday last year, and we had 2.4 million unique visitors [this year]. We expect to exceed the $300,000 goal for scholarship funds we set for 2008. All of [Shop.org's] proceeds go to the Ray M. Greenly Scholarship Fund, which is used to encourage undergraduates to pursue careers in e-commerce.