Cyber Monday is less than a week away and online merchants are in the final countdown to what for many will be the highest revenue day of the year. And if recent sales numbers are an indication, it's likely to set single-day sales records.
But if you look deeper, the numbers seem to show that while Cyber Monday is a proxy for more retail sales moving online, the day itself is getting a smaller slice of the holiday sales pie that starts in mid-November and stays high until the week before Christmas.
I recently pulled sales data for the tens of thousands of e-commerce stores using the Yahoo Small Business platform, and they support both the trend for higher sales on Cyber Monday and the "flattening" of Cyber Monday to be more evenly spread across the holiday shopping period.
Cyber Monday sales continue to grow
Our retailers largely mirror the national Cyber Monday trend with comScore reporting Cyber Monday sales breaking the $1 billion mark for online shopping in 2010, and hitting $3.45 billion by 2016. That's only half the story. While one-day receipts have been rocketing skyward, the percent of sales made on Cyber Monday compared to the rest of the week and season has been decreasing.
Here's some data that highlights the trend:
- In 2014, Cyber Monday sales were 33 percent of sales made that week.
- In 2016, Cyber Monday sales were only 25 percent of weekly sales.
If that trend continues, Cyber Monday may soon be just like any other day of the week.
Cyber Monday now a smaller share of seasonal revenue
And even the week surrounding Cyber Monday is getting less attention from online shoppers. Looking at sales data for Yahoo Small Business stores, the sales blitz continues to be the five-week period that starts in mid-November and runs until the week before Christmas.
Over the last three years, Cyber Monday week (which in my data does not include Black Friday) accounted for the following percentage of sales for the surrounding five weeks:
- 2014: 25.9 percent of sales occurred during the week of Cyber Monday
- 2015: 24.3 percent of sales were the week of Cyber Monday
- 2016: 23.6 percent of sales were the week of Cyber Monday
Reducing the peaks is a double win
For an online retailer, this all great news. Sellers are seeing shoppers spending increasingly more online and driving up same store revenue from one year to the next. And at the same time, a smaller percentage of those sales are concentrated on a single day.
This reduces the strain on internal systems to process orders, fulfillment teams that need to get shipments out, and support staff to answer questions and resolve issues. Essentially, it not only reduces the emotional strain on sellers, it allows those sales to be a bit more efficient, which hopefully increases their net profits.
Most top sellers are already ahead of the trend
After looking at the annual data, I met with a couple of our account managers who work directly with key e-commerce customers to help them increase their store sales and asked what their merchants were doing to stay ahead of the Cyber Monday changes. Key steps they are taking include:
- Using the term "Cyber Monday" in their sales promotions, but no longer restricting the sale to a single day. More frequently the term is being used in promotions that ignore the inherent time frame, so "Cyber Monday sale extended until Christmas" are becoming common.
- Creating a cycle of holiday sales that have little to do with Black Friday or Cyber Monday and instead providing super low prices on a rotating catalog of items. This way the retailers have something new to promote every few days, giving shoppers more reason to stay engaged and check back for deals.
From an operations standpoint, the timing shift suggests a couple of small changes to encourage sales and increase efficiency:
- Consider relaxing your return policy to be sure that you aren't discouraging early holiday shoppers who are buying gifts that may not be opened and returned until after New Years. If this complicates year-end bookkeeping, consider at least allowing exchanges or store credit for items returned in January.
- Be sure your fulfillment and shipping teams are fully staffed as deep into the season as possible. Consistently, around 20 percent of holiday's online sales (according to Yahoo store data) come in during the final week of the online shopping season. In 2017, that's the week of Dec. 11-17. If the trend holds, there will be plenty of new orders that week and you'll need the full team to get them processed and shipped in time for Christmas. It may be best to wait until around Dec. 20 to break out the eggnog.