Here’s what caught my attention in the commerce space this week.
US online shoppers spent $1.25 billion on Cyber Monday
We knew we were going to spend a lot of money over the four days from Black Friday through Cyber Monday; all the TV commercials, digital ads, and forecasters told us so. But no one knew just how much until it was over — and no one saw how much of the spending was going to happen online. After it was over, when the purchase buttons had been clicked and the UPS trucks were rolling, Cyber Monday (Nov. 28) turned out to be the heaviest U.S. online spending day in history, according to ComScore. Shoppers spent $1.25 billion online, 22% more than on Cyber Monday 2010, the only other billion-dollar-plus day in online spending history. This year’s Cyber Monday splurge capped a month of intensifying sales: more than $15 billion spent online since the beginning of the month.
If online sales growth was healthy, the growth in mobile sales was practically supernatural. PayPal Mobile reported a 552% increase in global mobile payment volume on Cyber Monday 2011 compared to the same day a year earlier. Of course, percentages are bound to look big when the baseline starts out low, and mobile payments have come a long way in the past 12 months. Claudia Lombana, PayPal shopping specialist, wrote on the company’s blog that mobile sales volumes were 17% above those on Black Friday and volume was heaviest between 2pm and 3pm PST — suggesting that, on the East Coast at least, shoppers waited until the workday was (mostly) done.
So, does all this activity mean that consumer confidence has returned and we’re about to buy our way out of the economic doldrums? Not exactly, writes Sheyna Steiner on Bankrate.com. Bankrate’s November Financial Security Index reports that 42% of Americans say they plan to spend less this holiday season while only 10% expect to spend more. Black Friday and Cyber Monday mania may be less about kicking off an orgy of spending than they are about seeking the best bargains to stretch limited funds.
A chat with a Groupon Now merchant
Groupon saw a big boost over the Black Friday-Cyber Monday weekend, too, reporting a 500% increase over last year for those four days. It’s a little hard to keep track of whether Groupon is hot or not. Its Nov. 4 IPO blew past critics, raking in $700 million to become the biggest initial public offer since Google’s in 2004. But within a few weeks, it saw its share price drop from its $26.10 opening-day closing price to $15.24 earlier this week. A boost in holiday sales could improve its standing, but many analysts are still saying the shares should be priced lower.
Whether Groupon’s share price rises or falls, investors would do well to focus not on on its over-hyped daily deals, but on Groupon Now, the company’s real-time discount service that lets merchants control when and how to offer deals. To find out more about it, I spoke with Dennis Cavanaugh the owner of 5 & Diner in Mesa, Ariz. Cavanaugh, who started out with a daily deal earlier this year, says he likes the flexibility of Groupon Now better. For example, he was able to increase one coupon offer of $10 for $20 worth of food up to $12 for the same offer and noted that there was no drop-off in uptake — so, he kept it there. “I can pause it, unpause it, change the hours of redemption, all the do-it-yourself things,” he says, “and I don’t have to call someone in Chicago. It’s all in real time. There’s no lead-time required on the decisions.”
Cavanaugh says that Groupon Now customers are also more likely to spend over the coupon amount than customers who bring in coupons clipped from a newspaper — $6 to $8 more on average. He suspects it has something to do with the fact that they’re affluent enough to afford a smartphone. And he notices that the Groupon Now offers bring in customers from further afield than the 3- to 5-mile radius that most of his customers come from.
Cavanaugh says he probably wouldn’t make another daily deal offer: “I like Groupon Now better. Groupon gave us a huge surge in its booking period, but you can’t control any aspect of it once it’s out there. It was my first try, and I didn’t know if the coupon was priced right. I know a lot more now. I think [Groupon Now] is a better tool for me to draw people in.”
RIM pursues a mobile wallet
Research in Motion announced two more Blackberry devices that support near field communication (NFC) and RIM’s small mobile-wallet trial with Telefónica, the Spanish telecom.
The Blackberry Bold 9790 and Curve 9380 join a few existing models that support NFC wireless communication, the leading contender for tap-and-pay wireless technology in mobiles. The RIM trial isn’t at the scale of what Isis is planning in the coming year, let alone the real-world capabilities of Google Wallet on Sprint’s Nexus S phones. At Telefónica’s headquarters in Madrid, 350 employees will get Blackberries that let them make purchases and gain access to the company’s buildings.
It’s not exactly tap-and-pay on the Metro, but it’s a start — one that RIM is hoping will slow its sliding market share to Android and Apple.
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- Bring your mobile to Black Friday
- At last, Groupon’s investor show hits the road
- Google juices its Wallet
- More Commerce Weekly coverage