TechWeb

Online Shopping Surged 22% On Black Friday

Nov 26, 2007 (11:11 AM EST)

Read the Original Article at http://www.informationweek.com/news/showArticle.jhtml?articleID=204203533


Online shopping surged on Black Friday, and most major retail sites held up well under the burden of increased traffic, according to recent reports.

ComScore found that online spending rose 22%, to $531 million, compared to last year, while Thanksgiving Day spending online rose 29% to $272 million. The company found that shoppers have spent more than $9.3 billion since Nov. 1.

"The Friday after Thanksgiving is known for heavy spending in retail stores, but it's clear that consumers are increasingly turning to the Internet to make their holiday purchases," comScore chairman Gian Fulgoni said in a statement. "Online spending on Black Friday has historically represented an early indicator of how the rest of the season will shake out."

Fulgoni said that Black Friday's growth shows momentum and bodes well for the season. He said he expected Cyber Monday sales to top $700 million.

"While this would make it the heaviest online shopping day on record, we can expect to see even stronger days ahead as the 2007 shopping season progresses into December," he said.

Video games, consoles, and accessories held the top slot for hottest retail product category, with a rise of 134% compared to Black Friday last year. The Nintendo Wii, PlayStation 3, and game Halo 3 drove growth in that category, Fulgoni said.

The furniture, appliances, and equipment category rose 36%, while consumer electronics rose 21%.

Online sales of toys rose 9% this year compared to last, and comScore attributed the slower growth in that category to recent disclosures about several toys containing toxic materials.

WebSitePulse, an Orlando company that remotely monitors Web-based systems, applications, and e-business transactions, said the Sears.com Web site was completely closed for online shoppers on Black Friday.

The site displayed a message saying it was "temporarily experiencing high traffic volume." The message appeared soon after 9 a.m. and didn't disappear until about 4:30 p.m, according to WebSitePulse, which said the message returned for another 45 minutes beginning around 9 p.m.

"Kmart.com, which is also run by Sears Brands, had the same problems, at the same times, but apparently the traffic there was not so heavy, and WebSitePulse's monitoring agents were able to complete successfully some of the tests during the day," the monitoring company said.

Keynote Competitive Research monitors traffic hourly from 10 major U.S. cities. The company reported mixed results for online retailers.

"Our monitoring of retail site performance has shown a definite slow-down in site performance over the course of Black Friday for many leading sites," Shawn White, director of external operations for Keynote, said. "Almost a third of the 30 leading retail sites we monitor for our holiday shopping index experienced significant slow-downs that impacted the product search and check-out processes -- and presumably will impact online sales."




EMarketer expects online shopping to ring up about $30 billion in sales this holiday season.

"Consumers are increasingly turning to the Web for their holiday shopping, and thus the success of a retailer's holiday season is increasingly tied to their site's performance," said White.

Keynote reported that a third of the 30 apparel, electronics, books, and music sites it monitors for its holiday retail index showed significant slow-downs as a result of the increased Black Friday traffic.

However, it is barely noticed by consumers with high-speed access, Keynote representatives said, adding that 5% to 10% slow-downs in traffic on Black Friday and Cyber Monday are common and unlikely to affect sales.

About a dozen sites with significant slow-downs usually had problems with product searches, product information, and check-out, Keynote found. Keynote's monitoring found that Buy.com and Lowe's experienced significant slow-downs. The worst-performing sites on Black Friday slowed by up to 400%, which does affect sales.

Overall, Web site performance is strong, White said.

"Online traffic and online shopping continue to grow... as part of consumer habit," he said. "And retailers are responding by planning in advance for the online holiday shopping season, building site capacity, and testing load and performance months and months before the season. That's paid off for most retailers, but a surprising number still have a ways to go."

The National Retail Federation's 2007 Black Friday Weekend Survey, conducted by BIGresearch, found that more than 147 million shoppers went to stores on Black Friday weekend, up 4.8% from last year.

Consumers seemed to favor smaller-ticket items and spent an average of $347.44, down 3.5% from last year. Nevertheless, the totals are still up 14.8% compared to 2005.

"While last year showed a greater emphasis on high-definition televisions, this year consumers were focused on lower-priced doorbusters like digital photo frames, laptops, and cashmere sweaters," NRF president and CEO Tracy Mullin said in a statement. "Though Black Friday weekend was a complete success for many retailers, the results of the holiday season won't be determined until the last two weeks of December."

Discounters, whose in-store traffic declined last year, rebounded with 55.1% of shoppers buying in person, according to NRF. That's up from 49.6% in 2006. The group said consumers also shopped in traditional department stores (38.7%), specialty retailers (43.2%), and online (31.6%).

The NRF found that the most popular items purchased were clothing or clothing accessories (46.8%) as well as books, CDs, DVDs, videos, or video games (41.7%). Other popular purchases this weekend included consumer electronics (35.7%), toys (28.2%), and gift cards (21.0%), according to NRF.

As of Sunday, November 25th, the average person has completed 36.4% of their holiday shopping, the same as last year. Only one in 12 consumers, or 8.2%, had finished their holiday shopping.

Retailers made up for the lower average expenditure with increased traffic.

Phil Rist, VP of strategy for BIGresearch, said that with consumers seeking more Cyber Monday promotions, the holiday season is off to a good start.

NRF predicts that total holiday sales will rise 4.0% this year to $474.5 billion.