Online spending during the week ending on December 2nd totalled nearly $6 billion according to comScore, setting a new single-week record. The market research firm on Sunday released its estimates for online spending so far during the holiday shopping season, and it is reporting significant year-on-year increases across the board. Total spending between November 1st and December 2nd is up 15% over 2010 to $18.7 billion and Cyber Week spending also grew 15% to approximately $6 billion. Online shopping on Thanksgiving day grew 18% to $479 million, Black Friday sales online were up 26% to $816 million and Cyber Monday sales grew 22% to $1.3 billion. “Cyber Monday kicked the week off with a bang as consumers opened their wallets to the tune of $1.25 billion, but it was only the beginning of a very strong week of online holiday spending,” comScore chairman Gian Fulgoni said in a statement. “Tuesday and Wednesday followed with billion dollar spending days, helping Cyber Week reach a record weekly total of nearly $6 billion in spending.” ComScore’s full press release follows below.
$6 Billion in ‘Cyber Week’ U.S. Online Spending Sets New Weekly Record as Three Individual Days Surpass $1 Billion Threshold
Free Shipping Incentive Used on Nearly Two-Thirds of Online Transactions During Most Recent Two Weeks
RESTON, VA, December 4, 2011 – comScore (NASDAQ : SCOR), a leader in measuring the digital world, today reported holiday season retail e-commerce spending for the first 32 days of the November – December 2011 holiday season. For the holiday season-to-date, $18.7 billion has been spent online, marking a 15-percent increase versus the corresponding days last year. The most recent week saw three individual days eclipse $1 billion in spending, led by Cyber Monday, which became the heaviest online spending day on record at $1.25 billion. Tuesday, November 29 reached $1.12 billion, while Wednesday, November 30 reached $1.03 billion. These three billion dollar spending days currently rank as three of the four heaviest online spending days in history (with Cyber Monday 2010 being the other).
2011 Holiday Season To Date vs. Corresponding Days* in 2010
Non-Travel (Retail) Spending
Excludes Auctions and Large Corporate Purchases
Total U.S. – Home & Work Locations
Source: comScore, Inc.Millions ($) 2010 2011 Percent Change November 1 – December 2 $16,257 $18,697 15% Thanksgiving Day (Nov. 24) $407 $479 18% Black Friday (Nov. 25) $648 $816 26% Thanksgiving Weekend (Nov. 26-27) $886 $1,031 16% Cyber Monday (Nov. 28) $1,028 $1,251 22% Week Ending Dec. 2 $5,164 $5,959 15% *Corresponding days based on corresponding shopping days (November 2 thru December 3, 2010)
“Cyber Monday kicked the week off with a bang as consumers opened their wallets to the tune of $1.25 billion, but it was only the beginning of a very strong week of online holiday spending,” said comScore chairman Gian Fulgoni. “Tuesday and Wednesday followed with billion dollar spending days, helping Cyber Week reach a record weekly total of nearly $6 billion in spending. As the deals from this week expire, it will be important to see the degree to which consumers return to the same retailers to continue their holiday shopping, thereby helping improve retailers’ profit margins, or if we experience a pullback in consumer spending – which has occurred in previous years – before promotional offers and spending intensity pick back up in earnest around mid-December.”
Free Shipping Surges to Record Levels
One of the most prevalent holiday season promotions used by online retailers is free shipping, which typically peaks around the Cyber Monday period. comScore’s analysis of the incidence of free shipping used for online retail transactions shows that this incentive is being used at record levels over the first few weeks of the holiday season. Throughout the 2011 holiday season, 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.
Weekly Holiday Free Shipping Analysis vs. Corresponding Weeks* in 2010
Non-Travel (Retail) Spending
Excludes Auctions and Large Corporate Purchases
Total U.S. – Home & Work Locations
Source: comScore, Inc.Week Ending Percentage of Transactions with Free Shipping 2010 2011 Point Change 11/6/2011 41.8% 52.2% +10.4 11/13/2011 44.7% 51.2% +6.5 11/20/2011 50.2% 56.0% +5.8 11/27/2011 55.0% 64.4% +9.4 12/4/2011** 52.2% 63.2% +11.0 *Corresponding weeks based on corresponding shopping days (November 2 thru December 5, 2010)
**Data based on partial week of data thru Dec. 2, 2011“Free shipping is one of the most important incentives that online retailers must provide during the holiday season to ensure that shoppers will convert into buyers,” added Mr. Fulgoni. “Consumers have come to expect free shipping during the holiday promotion periods, and retailers, in turn, have realized that they must offer this incentive if they want to maximize their share of consumer spending – especially at the outset of the shopping season. In fact, 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.”
The Importance of Free Shipping to Online Shoppers
As part of comScore’s annual holiday shopping survey of consumers, approximately 1,000 Internet users were asked about the importance of free shipping to their online purchase decisions. More than one-third of respondents (36 percent) indicated that free shipping was “very important” and that they would not make a purchase without it, underscoring the imperative for retailers to offer this incentive during the holidays. An additional 42 percent said that free shipping was “somewhat important” and that they actively seek out free shipping deals. Only 15 percent of respondents indicated that free shipping was not particularly influential in their purchase decision.
Q: “When making a purchase online this holiday season, which of the following statements best describes how important free shipping is to you?”
November 29-December 1, 2011, n=1,013
Total U.S. – Home & Work Locations
Source: comScore 2011 Holiday SurveyResponse Percentage of Respondents Very important – I will not make a purchase without it 36% Somewhat important – I actively seek out free shipping deals 42% Neither important nor unimportant – I would like to find it, but do not require it 12% Somewhat unimportant – free shipping has very little effect on my purchase decision 1% Very unimportant – I will make my purchase regardless of shipping costs 2% Don’t know/not sure 6% Despite its cost to retailers, free shipping also has a couple of important benefits to online retailers. First, it tends to generate higher average order values, which helps retailers to at least partially offset lower margins. Second, this incentive has for four years had its own marketing event – ‘Free Shipping Day’ (Friday, December 16 this year) – when thousands of merchants offer free shipping with delivery by Christmas Eve, and in past years Free Shipping Day has helped bolster 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, representing a dramatic 61 percent increase over the corresponding shopping day the previous year
