Posts tagged ‘Buying Online’

Cyber Monday – The Online Response to Black Friday

Today is Cyber Monday – The e-Business version of Black Friday. Cyber Monday traditionally falls on the Monday following Black Friday. It is the day when many people who are presumed to be working are huddling behind their computer screens looking for the best deals to buy online. The term Cyber Monday was apparently coined by, the online arm of the National Retail Federation, which is the trade group for online retailers, in 2005, when it was noticed that people were continuing shopping online after returning to work on the Monday following the Thanksgiving break. survey finds that 13 million more Americans (84.6 million total) plan to shop online on Cyber Monday this year over last year. 72.8 million of them will shop from work (representing 55.8% of workers with Internet access). This is up from 44.7% in 2005.

Of retailers, 83.7 percent will have special marketing plans/promotions on Cyber Monday, up 72% from last year. The most popular plans for increasing online sales are specific deals/promotions (38.8%), email campaigns (32.7%), one-day sales (24.5%), and free shipping (22.5%). Find the full report and historical data at

Even so, Cyber Monday is not the busiest online shopping day of the year. Traditionally, the busiest days are in mid-December as buyers rush to get those last minute hard-to-find gifts while there is still time for delivery before Christmas.

Some problems arise on Cyber Monday including sites slowing down or simply crashing as business picks up. Businesses that aren’t prepared for the outcome of successful marketing campaigns may experience these problems. On Black Friday 2008 online shoppers experienced these problems even at large online retailers such as and was actually down for a good portion of the day (Worthen, 2008). Not forgotten is the “network configuration issue” that shut down “tens of thousands” of Yahoo Small Business online merchants from 6 a.m. to 1 p.m. on Cyber Monday in 2007 (Choney, 2008). Firms must also be able to handle the business of successful campaigns. Many parents will remember when Toys R Us failed to deliver by Christmas in 1999 on many orders placed during December of that year.

Online holiday sales are expected to be flat this year according to Online sales declined 4% during the first 23 days of November when compared with the same time frame in 2007, following a trend of declining growth rates in the six previous months (15%, 12%, 11%, 8%, 6%, 5%, 1%). According to, a market-research firm, online sales in November-December of this year are expected to remain flat compared with the previous year – a stark change for online retailers accustomed to double digit gains (Lawton 2008). Even so, reports online spending this year was up six percent on Thanksgiving Day and up one percent on Black Friday over last year, an encouraging sign for online retailers. 11% of online Black Friday sales came between the hours of 4:00 a.m. and 8:00 a.m. – time traditionally spent standing in line at stores like Best Buy, Toys R Us and Walmart. Nearly 50% of online sales occurred between 8:00 a.m. and 4:00 p.m.

The declining growth rates in online shopping sales over the past six months are consistent with the slowing U.S. and global economies. Online retailers are not immune to the problems plaguing brick-and-mortar firms. finds that shoppers are increasingly concerned about unemployment/job security and financial markets conditions. Shoppers making less than $50,000 per year are actually spending 3% less online than last year while those making between $50,000 and $100,000 are only spending about 1% more online. According to another study by, 47% of online consumers are buying fewer gifts this year and 46% are buying less expensive gifts. These same online buyers suggest they will respond more to coupons, free shipping, and comparison shopping.

Only three hours of Cyber Monday left. I still have some shopping to do!

Data Sources and Bibliography, comScore Forecasts Flat Growth for 2008 Holiday E-Commerce Spending, November 25, 2008, Accessed December 1, 2008, U.S. Retail E-Commerce Growth Slows to 1 Percent in October as Concerns about Inflation, Jobs and the Financial Markets Cause Consumers to Curb Spending, November 18, 2008, Accessed December 1, 2008., Black Friday Sees $534 Million in E-Commerce Spending, Up 1 Percent Versus Year Ago, November 30, 2008, Accessed December 1, 2008., Site created by when it came up with the “Cyber Monday” marketing scheme. It is a clearinghouse of sorts for holiday shopping sales of online firms., A Gimmick Becomes a Real Trend, BOB TEDESCHI, , New York Times, November 26, 2007, Accessed December 1, 2008, Getting ready for ‘Cyber Monday’: Despite projected drop in Web holiday sales, sites may be busy with lookers, By Suzanne Choney, November 30, 2008,, Accessed December 1, 2008, Survey Finds 85 Million Americans to Shop on Cyber Monday, Up From 72 Million Last Year– Unveils Select Deals of the Hour—, Accessed December 1, 2008., Retail Sites Crash as Shopping Season Opens, Ben Worthen, November 28, 2008, 4:49 pm, Accessed December 1, 2008, Online Shopping to Plateau As Slump Hits Cyberspace, CHRISTOPHER LAWTON, NOVEMBER 26, 2008, Accessed December 1, 2008.

Who Is Buying Online?

It is time for another post with some economics of selling online statistics. Today’s question is “who is buying online?”

A recent PEW Internet and American Life survey shows that 75% of all U.S. adults in 2007 are using the Internet. Among users are 74% of adult women and 75% of adult men. The numbers are predictably up from the 2000 survey which showed that 46% of adult women and 51% of adult men were online. Usage has increased from 2000 to 2007 from 50% to 76% of white adults, 34% to 56% of black adults, and 43% to 79% of English-speaking Hispanics. As expected, internet access increases with age, income, and education.

The statistics on U.S. internet access suggest that there is a “digital divide”. While access has increased in all groups :

  • Young are more likely to be wired than old. (18-29 year old 92% to 65+ 37%)
  • Higher income more wired than lower income. (<$30,000 61% to $75,000 93%)
  • Highly educated more likely to be wired than less educated. (
  • White (76%) and Hispanic (79%) Americans are more likely to be wired than African-Americans (56%)
  • Suburban (77%) and urban (77%) Americans more wired than rural (64%) Americans
  • Full-time (58.6%) employees are more wired than part-time (12.5%) employees.
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    So what are Americans doing online? According to the study by PEW Internet and American Life, the more popular activities (reported by greater than 70% of users) include reading and sending email, searching for information on products or interests, getting directions or maps, and getting weather reports, news or travel information.

    Of particular interest to this course is that an estimated 78% of users research a product or service before buying it. 68% say that they buy products online. The demographics of those who buy products online are different than internet users in general. For example, of folks who make purchases online :

  • Buyers online are 74% White while only 10% Black and 10% Hispanic.
  • Buyers are more likely to be between 30-49 (46%) followed by 18-29 (26%) and 50-64 (23%).
  • Buyers tend to be more highly educated with 39% having at least some college and only 6% without high school diplomas.
  • Buyers seem to be fairly evenly distributed across income groups (however, a good percentage of buyers would not report that statistic).
  • Buyers are more likely to be from suburban (50%) areas rather than urban (25%) or rural (15%) areas.
  • 77% of online buyers have broadband access.
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    The study reports that the number of online users either buying or researching products online has roughly doubled since 2000.

    To catch up on some world internet statistics, see World stats show that the largest number of Internet users come from Asia, followed by Europe. However, internet penetration (users/population) is highest (73.6%) in North America (including Canada and Mexico) and lowest (5.3%) in Africa.

    World statistics also show a digital divide. In nearly all the countries surveyed in an OECD study (pgs. 21-23), internet use decreases with the age of the user, increases with the education of the user, and increases with the income of the user. Globally, households with children are more likely to use the internet.

    Sources and More Information:, Demographics of Internet Users, October-December 2007 Survey.
    MRI CyberStats, Fall 2007,, Internet Access and Usage in the U.S., Fall 2007., pg. 8, Online Shopping, Pew Internet & American Life Project, February 13, 2008., Most Popular Internet Activities, Pew Internet & American Life Project tracking survey., OECD Study, The Future of the Internet Economy: A Statistical Profile, OECD Minitsterial Metting, Seoul, Korea, June 2008.