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So long, Cyber Monday?

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Need a lift? Online retailers continue to rely on Cyber Monday to give holiday sales a boost. Credit: Dan Hontz via Flickr.

As long as there has been e-commerce, there has been Cyber Monday. But is that old gem of the new economy endangered?

Online retailers for the last decade have counted on the Monday after Thanksgiving to deliver for Web merchants what Black Friday does for bricks-and-mortar stores -- a turbo boost into the holiday shopping season. Back then, many people hopped onto their employers' fast Internet connections to do some quick holiday shopping when they returned to work after Thanksgiving.

But with more than 60% of U.S. homes now sporting high-speed Internet, more people are now flipping through those online catalogs at home, said Ken Cassar, vice president of Nielsen Co.'s online research division.

As a result, more online stores aren't waiting until Monday to get the party going. They're throwing their own Black Friday events. Some, including Amazon.com, are doing deals every day this week.

That doesn't mean Cyber Monday will evaporate, however. That's because some people still shop at work, away from the prying eyes of family members. "Mondays still tend to be busier shopping days," Cassar said.

It's also a good marketing hook that retailers want to keep alive.

"Retailers liked the marketing focus," Cassar said. "It remains a big shopping day, but it's now fueled more by retailer marketing and promotion."

That means online merchants will be out in force trumpeting Cyber Monday specials.

More merchants say they plan to offer some type of promotion such as free shipping or extra discounts on Monday, 87% compared with 83% last year, according to a survey by Shop.org, the online division of the National Retail Federation. Check out Shop.org's Web page listing Cyber Monday specials offered by 650 of its member merchants.

The shipping promotions are likely to come with fewer...

... strings, said Scott Silverman, Shop.org's executive director. Half of the online merchants planning to toss out shipping charges said they would not impose conditions, such as minimum order amounts, up from 25% of retailers in 2005.

Whether that will help lift online retail sales this holiday is up for debate. Shop.org, whose members tend to be bigger merchants, said a survey of 60 retailers showed 70% of respondents expected online sales to grow this holiday over last year.

But Cassar expects sales to be flat this holiday after falling 6% last year. "There is high optimism among larger retailers," he said, "but very low optimism among smaller online retailers, who tend to struggle more."

For a look at how online sales have trended thus far, check out the chart below.

Online Sales

Research firm comScore, which tracks online spending, this week projected a mere 3% growth in holiday spending online, to $28.8 billion from $28 billion last year. From Nov. 1 through Nov. 22, online sales have ticked up just 2%.

"Online spending this holiday season will likely be tempered by the stark reality of 10% unemployment and less disposable income in many consumers’ wallets,” said comScore Chairman Gian Fulgoni.

A Nielsen survey bore additional evidence for the more pessimistic camp. Fewer people are planning to buy online this holiday, 63% this year versus 71% last year, according to the survey. Of those who are planning to shop online, 31% said they planned to spend more than $300, down from 42% last year.

How can retailers trigger more spending?

"They're hoping to do for Cyber Monday what the greeting card business did for Valentine's Day," Cassar said, "which is to create demand."

Looks like there's a reason for Cyber Monday to stick around after all.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

 
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