- The Washington Times - Friday, December 11, 2009

Despite dismal holiday sales forecasts, online sales are surging this season and retailers are using social networks and iPhone applications to maintain momentum.

Brick-and-mortar retail stores including Macy’s Inc., Best Buy Co., J.C. Penney Co. and Staples Inc. are using Twitter, Facebook and YouTube to generate online buzz, luring shoppers to their stores and Web sites with special sales and promotions. More than half of retailers are including social networks in their marketing strategies today, up from 4 percent in 2007, according to a survey by BDO Seidman.

Online buying is projected to increase 8 percent this holiday season, up from a 5 percent gain a year ago, according to Forrester Research. The uptick is causing retailers to spice up their online offerings with sweepstakes and special promotions for the Web-savvy shopper.

For example, Staples is offering Twitter “followers” an opportunity to win a $1,000 Hewlett-Packard laptop and printer as part of its Daily Tech Giveaway sweepstakes. Old Navy’s Facebook fan page, which has more than 354,000 fans, is offering men’s crew and V-neck T-shirts for $8 instead of the regular price of $16.50.

Social networks have added price-based grazing, shopping with virtual friends and “preview dating” hot products to the online shopping experience, said Marian Salzman, president of Euro RSCG Worldwide PR, a marketing communications firm.

“Social networks let people connect with one another and retail and keep their shopping communal,” Ms. Salzman said. “In the Twittersphere, consumers looking for bargains own the day. They are in charge and can band together to maximize their own power.”

Spurred by Cyber Monday’s online discounts, online holiday spending totaled $16 billion as of Dec. 6, a 3 percent increase over last year’s pace, said comScore Inc., a Reston, Va., market research firm.

Online holiday spending reached a 2009 peak of $4.6 billion last week, heavier than any week in 2008 but still below records set in 2007. Cyber Monday produced $887 million in online spending, up 5 percent compared with a year ago, matching the heaviest online spending day on record, according to comScore.

The 5 percent growth in Cyber Monday sales was driven primarily by an increase in the number of shoppers on the Internet, reflecting consumers’ increasing familiarity and comfort with online buying, analysts said. While the average online buyer spent about $100 this year, 2 percent less than last year, the number of online buyers grew by 6 percent to 8.7 million, according to comScore research.

While online spending still constitutes less than 5 percent of overall retail sales, according to retail consultant Howard Davidowitz, it has provided some relief to merchandisers combating sluggish in-store sales.

“Retail brick-and-mortar stores are not disappearing any time soon,” said Christian Gordun, chief executive of CouponCraze.com, an online coupon database for consumers. “People will always feel more comfortable in a store trying on clothes and leaving with them. But what is happening is that mainstream brick-and-mortar retail outlets have finally started to embrace the impact of online retail and marry the two together.”

Data collected by Mr. Gordun’s company indicate that six of the top 10 online retail outlets on Black Friday and Cyber Monday were traditional brick-and-mortar stores such as Target Corp., Sears Corp., Kohl’s Corp. and Macy’s.

Moreover, said Mr. Gordun, the Monday after Thanksgiving isn’t the only Monday before Christmas to find a hot deal. Shopping during “Green Mondays” also can benefit consumers, he said, referring to the two Mondays before Christmas.

“The next two Mondays, Dec. 14 and Dec. 21, tend to be Green Mondays,” said Mr. Gordun. “Merchants are finding that either they didn’t hit the sales goals that they wanted for Cyber Monday and Black Friday or there is leftover inventory that they want to get rid of. So they re-purpose themselves and extend promotions. Promotions available on the first Cyber Monday disappear and then return … to cater to shoppers that wait later in the season to shop.”

Dec. 14 and Dec. 21 are important days for other reasons, too. Dec. 14 ushers in the last week customers can order online with standard shipping and receive their gifts by Christmas. By Dec. 21, procrastinators will have to resort to overnight or second-day delivery, Mr. Gordun said.

“The online merchants are going to be hawking their merchandise, offering promotions for shipping upgrades,” he said.

Last year’s large inventories on the heels of a disastrous recession hit department stores hard, forcing them to discount heavily. This year, retailers have focused on lowering inventory in an effort to sell more items at full price, prompting many consumers to shop early before supplies are depleted.

But shallow inventories will not have much impact on online shoppers, Mr. Gordun said.

“E-commerce retailers are at a bit of an advantage in that area,” he said. “They can be much more dynamic in terms of ordering and shipping from various warehouses and using other tools to make merchandise available.”

Janika Barnes, 31, of Antioch, Calif., learned a valuable lesson while shopping for her two young sons on Black Friday. Always have a “plan B,” she said.

Ms. Barnes couldn’t find the cookware set or the Nintendo Wii games that she wanted at a nearby Wal-Mart store in Martinez, but she was able to find them on Wal-Mart’s Web site.

“This might sound crazy, but next year, I’m going to take my laptop to the stores with me,” said Ms. Barnes, who braved the crowds, the cold and the lines on Black Friday to get a good deal. “If I find what I’m looking for in the stores, then I will buy it there. But if not, I’ll check online. This year, the stores only had a few of the most popular items on the shelves.”

“It’s sort of a ritual for people to shop in the stores during the holidays, but it’s hard to get all of your shopping done that way. By shopping online you can do your research and compare prices without driving to another store or leaving the comforts of home,” said Andrew Lipsman, a market analyst for comScore.

Social media have evolved into a major platform for retailers this holiday shopping season. Twenty-eight percent of holiday shoppers in a recent comScore survey said social media influenced their holiday purchases.

More than 5 percent of respondents indicated they have followed a fan page on Facebook to take advantage of special offers and deals, while 6 percent said they have been influenced by a friend’s Facebook status update referring to a particular product. Five percent of respondents indicated they had followed a company on Twitter to take advantage of special offers and deals, while 3 percent said that a friend’s Tweet about a product influenced their purchase behavior.

“The social networking scene is growing fast as a very organized word-of-mouth technique,” Mr. Gordun said. “Think of all those iPhone users who had access to all of these amazing tools, applications which offered maps of malls and deal alerts. We saw Twitter people sharing with each other which stores had what items and at what price.”

Ms. Barnes, a tech-savvy consumer, used an iPhone shopping application to locate specific items at the lowest price. “I just typed the item in my phone and it gave me the item, the price and all of the stores who have it in a 20-mile radius,” she said.

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