After a disappointing Black Friday, retailers saw E-Commerce sales jump 15.6 percent on Monday (Dec. 1), aka Cyber Monday, compared with the same day last year. That stat comes from Channel Advisor, which tracked transaction data for more than 2,700 retailers selling online between midnight and noon Monday, according to the Wall Street Journal.
Figures were, however, all over the place. IBM Digital Analytics Benchmark showed a mere 8 percent growth in Cyber Monday sales, Reuters reported. And ComScore data over the weekend showed a 32 percent rise in online orders on Thanksgiving and 26 percent on Black Friday, Reuters said.
But a sales jump doesn’t necessarily translate into a profit jump and the fact that in-store sales still blow away E-Commerce ones makes an online boost less than thrilling.
“While conventional wisdom holds that online sales should be more profitable, because websites don’t need the pricey real estate and labor necessary to maintain a store network, many retailers actually earn less or even lose money online after factoring in the cost of shipping, handling and higher rates of returns,” the Journal story noted. “For retailers that outsource their Web and fulfillment operations, costs can run as high as 25 percent of sales, industry analysts said. Kohl’s says its profitability online is less than half what it reaps in its store. Walmart says it expects to lose money online at least through early 2016 as it invests to build its technology, infrastructure and fulfillment networks. Target says its margins will shrink as its online sales grow. Best Buy said faster growth on its website will weigh on its profitability at the end of the year. And Primark, the European discount retailer that plans to open eight U.S. stores, has shunned online retailing altogether because it deems it unprofitable.”
Online leader Amazon, however, did quite well, initial figures suggest.
“Amazon’s same-store sales rose 26 percent, 24 percent and 46 percent on Thanksgiving, Black Friday and Cyber Saturday, respectively,” according to Channel Advisor data, reported Marketwatch. “That rate of growth outpaced the industrywide average of 20 percent, 22 percent and 27 percent on each of those three days. While the three-day period didn’t accelerate from its prior-year level, (Pacific Crest analyst Chad) Bartley said the growth is still strong and indicates the company gained market share.”