This Holiday Season, Every Day is Cyber Monday
BY Evan Klonsky
Hoping to spread the Black Friday cheer, online retailers are piling on the discounts all month long.
EGG CRATES: The online retailer Newegg.com hopes to keep its New Jersey distribution center humming all month long, not just on Cyber Monday.
First came Black Friday. Then we had Cyber Monday. Now, get ready for Black November. This year, as never before, online retailers are planning an entire month of discounts geared to draw holiday shoppers to spend more money.
For example, online retailer Newegg.com, which sells consumer electronic and IT products online, began the month with an offer for a 120 GB Western Digital hard drive priced at $20. The move paid off in brisk sales, says Bernard Luthi, Newegg's vice president of marketing and merchandising. "People are starting to realize that it's a black entire month," Luthi says. "And that's why we're working to put out an event every day."
Newegg isn't alone in trumpeting month-long bargains. Sears ran a "Black Friday" promotion on the first of the month (a Monday, as it happened), while other big-box retailers such as Wal-Mart rolled out early free-shipping promotions. Fashion retailers are casting a wider net for discount-eager buyers, too—especially Groupon-inspired member-sales sites such as Ideeli.com and HauteLook.com, which have been running expanded sales.
Many companies are using social media to extend the Black Friday-Cyber Monday party, or pushing sales through mobile apps made for iPhone and Android phone users. Ideeli, the discount designer sale site uses Twitter to respond to queries from its 16,000 followers, and employs a hashtag to promote Black Friday week (#ideeliblack). Newegg leaks information about upcoming deals to the more than 400,000 shoppers who are fans of its Facebook page. The site's user-moderated online community, Eggxpert, also guides would-be buyers through support and product advice. "We don't have our own tech support team," Luthi says. "So we rely on this community and use it as a means of communicating back and forth with customers."
The boom of online browsing and shopping throughout the month, however, isn't posing as big of a threat to in-store Black Friday as one would think. BDO USA, an accounting and consulting firm, projects a 3.8 percent increase in Black Friday sales, with brick-and-mortar retailers placing the emphasis on getting customers away from their screens and into stores. The prominence of month-long promotions may instead cannibalize Cyber Monday sales, as businesses attempt to spread deals throughout the month. BDO predicts a 2.5 percent increase in Cyber Monday sales, and 74 percent of chief marketing officers expect sales that day to stay flat, according to a survey.
A desire for better inventory management is helping to drive the trend. Running daily deals helps retailers calibrate how much stock they will need day-in and day-out rather than being taken by surprise by a product boom and selling out too quickly."We've seen retailers do a very good job the last couple of years maintaining and managing their inventory levels," says Ted Vaughan, a partner at BDO USA.
Website downtime is another concern that Black November promotions are meant to address. E-commerce sites have in recent years been hobbled during the spikes in traffic on Black Friday and Cyber Monday. Of course, downtime can occur any time a Black November promotion heats up. Earlier this month, the site for home improvement retailer Lowe's crashed after a promotion from Facebook.
Though there has yet to be a full on crash at Newegg, Luthi said he saw significant slowdown last year on Black Friday, the site's highest traffic day for the year. "You try to mitigate that through IT infrastructure and making sure your entry pages are correctly weighted," Luthi says. "This year, we're taking great care that we won't have the site go down."
At the company's 385,000 square foot distribution center in Edison, New Jersey, which distributes 40 percent of the company's sales, a seamless order-processing system is gearing up to maximize sales this holiday season. "One-hundred percent of orders received by 3:30 pm will go out that day," promises Luthi, as he leads a tour group through the building filled with cardboard boxes and bubble wrap. When supplies do run short, he adds, it is critical to communicate with customers in order to prevent hurt feelings.
Retailers' ultimate goal this year may simply be to get consumers shopping again after several dismal years of holiday sales. If a steady stream of deals is the best way to reach frugal, post-recession shoppers, businesses are willing to oblige them. "People are really price-conscious, maybe more so than they were a year ago or two years ago," Luthi says. "You have to work a little harder, but I still think that buying optimism is there."