US Insights

Cyber Monday deal fatigue sets in

Meaghan Werle

Analyst

Retail 11.30.2016 / 16:00

Ecommerce_sales

Cyber Monday’s reputation as the holiday eCommerce event is waning.

Cyber Monday continues to evolve into “Cyber Everyday,” with retailers extending month long Black Friday promotions to online. As Black Friday loses its luster in stores and heats up online, increased eCommerce sales over the holiday weekend had us wondering if shoppers would experience retail burnout by the time Cyber Monday rolled around.

While an initial read by Adobe released Monday evening indicated that Cyber Monday online sales were expected to grow 10.2% to a record-high $3.39 billion, this projection narrowly surpassed Black Friday’s online sales estimate of $3.34 billion. Although Cyber Monday maintains its reign over eCommerce sales for another year, the thin margin between the two sales events suggests that Cyber Monday’s reputation as the holiday eCommerce event is waning.

As control over holiday shopping shifts from retailers to digitally empowered shoppers, retailers need to rely on much more than the usual price discounts, free shipping offers, and flex-fulfillment options of Cyber Mondays past. Instead, they must employ new tactics — such as content and exclusives — to recruit and reward their most engaged digital shoppers.

Prolonged Promotions Dilute Cyber Monday’s Impact

In keeping with the themes we discussed in our Black Friday recap, the expansion of the holiday deals season throughout November was again evident on Cyber Monday. Target, for example, offered 15% off everything online and in stores to cap its “10 Days of Deals.” Kohl’s, Macy’s, Home Depot, Sam’s Club, Dollar Tree, and Amazon all advertised “Cyber Week/Days.” Furthermore, deals featured on Monday were not significantly differentiated from the discounts shoppers have been seeing all season, in effect diffusing Cyber Monday’s call-to-action urgency.

Kohls Cyber Days

This continued blurring of Black Friday, Cyber Monday, and the broader holiday sales season speaks to the seamless and convenient shopping experience that shoppers desire, especially during peak spending periods. In fact, a National Retail Federation survey found that 44 percent of consumers shopped online over the Thanksgiving weekend compared with 40 percent who shopped in stores. Shoppers no longer distinguish among a brand’s store, app, and website, putting pressure on retailers to appeal to holiday shoppers with ongoing promotions, regardless of when or how they shop.

Expanded Access to Convenient Fulfillment Options

As Amazon continues to elevate shoppers’ expectations for immediacy, retailers across the board again layered status quo shipping promotions, including discounted or free shipping and lower qualifying basket thresholds. In many cases, retailers leveraged their physical assets by positioning in-store click-and-collect services as a convenient alternative to home delivery. While this trend is consistent with what we reported last year, our analyst team noted that retailers that are investing heavily in fulfillment innovation and expedited shipping expanded both “buy online, pick up in store” and home delivery this year. Examples include CVS’s partnership with Curbside and Walmart’s recently expanded pickup assortment.

Exclusive Products, Service Tie-Ins a New Way to Drive Shoppers Online

Retailers sought to entice shoppers with exclusive products to elevate urgency and drive online traffic. Amazon cultivated Prime member loyalty with discounts on its Prime-exclusive private label perishable brands and deals on select items from its Lark & Ro private label apparel line. Birchbox offered deeper discounts to its “Ace” members. Sephora granted Beauty Insiders Cyber Monday access to yet-to-be released spring beauty products and exclusive new items. To outsmart competitive pricing and encourage bigger baskets, retailers also used the nimble nature of online to their advantage by offering limited-time combo packs, such as Home Depot’s bundled DeWalt tools.

We also witnessed more product-service tie-ins as retailers asserted their role in providing a differentiated online experience. This type of promotion was especially relevant in the home improvement category, where retailers such as Wayfair, Build.com, and Amazon connected products with professionals. By competing on more than just price, these retailers added value to the holiday shopping experience while capturing incremental spend from shoppers.     

New Incentives Engage Shoppers on Emerging Retail Platforms  

As eCommerce becomes the platform of choice for holiday shoppers, retailers are experimenting with new ways to intersect with shoppers digitally on Cyber Monday. Mobile poses an opportunity for retailers to reach busy shoppers on the go. While Adobe suggests that Cyber Monday’s expected $1.19 billion mobile revenue is expected to be slightly less than Black Friday’s, this estimate is still a 48% year-over-year increase, indicating that retailers are dedicated to growing this shopping channel. As a result, mobile-exclusive offers were widespread on Cyber Monday.

Amazon helped acquaint shoppers with voice shopping by offering Alexa-exclusive deals and a $10 gift card to shoppers who made a purchase by voice. Given the recent launch of Google Home, we expect this trend to rise next year as smart devices become more mainstream and shoppers become more comfortable using voice technology to make purchases.

Integrating Entertainment and Commerce Helps Build Excitement

More retailers also implemented innovative Cyber Monday engagement tactics, such as social media and video, to elevate exposure and build excitement. Instagram recently began testing its new retail capabilities. Participating retailers, including Macy’s, used this platform on Cyber Monday to showcase discounted products; from there, shoppers were redirected to the retailers’ mobile sites.

In addition, retailers took a page from Amazon’s playbook and capitalized on Cyber Monday to drive awareness of their media content, including Wayfair’s “The Way Home” and Macy’s video channel. Walmart even hosted a “Cyber Monday Live” segment that highlighted deals, Walmart exclusives, and product demos.

Cyber Monday 2017: What’s Ahead

We anticipate that retailers that evolve their Cyber Monday messaging to focus on lifestyle and engage shoppers beyond discounts will be most successful at sustaining Cyber Monday relevance. Next year, we’ll be watching specifically for greater focus on “in the moment” content, Cyber Monday- exclusive product bundles and offers for the best shoppers, more diversified promotions across digital platforms (such as social media outlets and voice), and the escalating importance of the mobile screen as the site of both interaction and conversion.

Source: Kantar Retail

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