Consumers continue to set records with online shopping sales this holiday season. After spending a whopping (and record) $1.25 billion on Cyber Monday, online shoppers continued spending online, with two other days in the past week eclipsing the $1 billion mark in e-commerce sales, bringing the total week’s value to $6 billion. comScore reports that Tuesday, November 29 reached $1.12 billion, while Wednesday, November 30 reached $1.03 billion. These three billion dollar spending days currently rank as three of the four heaviest online spending days in history (with Cyber Monday 2010 being the other). To date, $18.7 billion has been spent online this holiday season, a 15 percent increase from the same period last year.
So what is the reason why more consumers are spending online? comScore says that free shipping is one major factor many shoppers are considering when paying for presents this holiday season. This incentive, says the data research company, is being used at record levels over the first few weeks of the holiday season.
In fact, more than half of all transactions have included free shipping with rates increasing later into the season. The week of Thanksgiving (week ending Nov. 27) saw free shipping occur on 64.4 percent of transactions, while Cyber Week has maintained a similar level at 63.2 percent. In each case, these rates were approximately 10 percentage points higher than last year, showing that more consumers are using these incentives.
comScore chairman Gian Fulgoni says that most consumers actually expect free shipping deals during holiday promotion periods, and retailers are realizing that including this incentive is necessary to lock-in shoppers. More than three-quarters of consumers say that free shipping is important to them when making an online purchase, and nearly half say they will abandon their shopping cart at checkout if they find free shipping is not being offered, he explains.
Interestingly, free shipping also it tends to generate higher average order values, which helps retailers to at least partially offset lower margins. In fact, on Cyber Monday, IBM reported that the average order amount was up 2.6 percent this year from $193.24 to $198.26.
As retailers continue to offer free shipping in the next few weeks, we’re left to wonder if ‘Free Shipping Day’ and the last few weeks of the holiday season will bring even higher sales. For background, Free Shipping Day is a marketing event that generally takes place Friday, December 16, one of the last days when merchants offer free shipping with delivery by Christmas Eve.
comScore says that in past years Free Shipping Day has helped boost online spending activity later into the season. Last year’s Free Shipping Day, for example, was the third heaviest online spending day of the year at $942 million, a 61 percent increase from 2009.
With Black Friday, Cyber Monday, and now the remaining holiday shopping period continuing to break online sales records, clearly more and more consumers are flocking online to get better deals. And brick and mortar stores may be in trouble if this trend continues in future holiday seasons. With the massive amounts being spent this season, it does make you wonder if there will be a day when all of our holiday shopping will be done online.
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