Thursday, February 2, 2023

Cyber Monday, the marketing insight that boosted e-commerce

There is a strange paradox concerning Black Friday and Cyber Monday. The first one is the fourth Friday in November, the day after Thanksgiving in the United States, while the latter is the Monday that comes three days after Black Friday. Much younger as an anniversary than Black Friday, Cyber Monday is a marketing gimmick dedicated exclusively to online shopping, designed precisely to make up for the day of shopping with big markdowns in all the shops in the US (and now also in Europe and the rest of the world) that with Black Friday opened the Christmas shopping season. 

The paradox is that, despite the different traditions, Black Friday has overtaken Cyber Monday in terms of overall online spending in recent years. An overtaking that has matured with the steady growth of e-commerce, which has recorded resounding increases year after year, even though the single day that recorded the highest overall spending among US consumers was Cyber Monday in 2020. When in 24 hours, online sales reached $10.7 billion. It was certainly no coincidence that it happened two years ago when lockdown and the Covid-19 pandemic spread around the world and pushed digital shopping to records never before touched (and never equalled even in the two years that followed). 

How Cyber Monday came about

To understand what led to Cyber Monday’s birth, one must keep in mind the development and spread of the Internet during the 1990s and 2000s. In 1994 Amazon was founded; eBay came along the following year; in 2000, Walmart launched its website. Three important facts paved the way for a meaningful change: convincing people to try online shopping, not as a replacement for physical shopping, but as an alternative. Because buying a product on the Internet means being able to do so at any time without wasting time going to the shop. 

After the first online shops had taken hold and counted on an already large and growing customer base, someone thought of finding an event equal to Black Friday but restricted exclusively to digital purchases. The idea was to capitalise on the increase in sales during the Thanksgiving weekend each year. 

“Cyber Monday quickly becoming one of the biggest online shopping days of the year”. In this headline of a shop.org press release published on 28 November 2005, a term appeared for the first time that would soon mark the history of shopping. Ellen Davis coined it, public relations of the National Retail Federation, who found a fortunate formula to summarise the trend that emerged from research carried out in 2004, which indicated that the Monday following Thanksgiving was one of the most profitable days for those selling products online (77% of digital shops had recorded a significant increase in sales). A scenario that, according to the New York Times, was based on the behaviour of millions of Americans once they returned to work after the Black Friday holiday shopping weekend. 

Thanks to the fast connections to computers in the office (which were either not there at home or travelled much slower), workers were keen to continue shopping online. Some brighter marketers sensed that they could ride the wave and exploit that post-Thanksgiving Monday as a digital shopping day. Resuming the White Wednesday launched in 2003 by Tony Valado for 1800Flowes.com. 

Initially, Davis had thought of naming the day Black Monday and Blue Monday, solutions that were later discarded because the former was reminiscent of Black Monday, which coincided with a stock market crash in 1987, while the latter name seemed too negative to be associated with a shopping day. Aside from the name, Davis’ predictions turned out to be right because, on the post-Thanksgiving Monday of 2005, online sales recorded a 26% increase over the previous twelve months. He had gotten the day wrong but found the most effective formula to boost revenues for online retailers. 

The evolution of the online shopping day

There have been several highlights among the seventeen Cyber Monday editions held so far. The online battle between Amazon and Walmart originated on this day in 2008, when Amazon.com’s traffic increased 21% year-on-year, marking its overtaking of its direct rival as the number one retail site. The following year, in the wake of Black Friday, Cyber Monday also started to go beyond 24 hours, with many retailers extending the discount period by up to 60%. The first to announce five days of promotions was Walmart. 

In 2010 for the first time, US consumer spending on Cyber Monday exceeded $1 billion. And while for the first few years, the deals were only on certain products, in 2015, Target offered 15% discounts on all products available on its site. 

The difference between Black Friday and Cyber Monday has been fading over the past decade. The global spread of e-commerce has broken the tradition linking the former to shopping in physical shops and the latter to digital ones. Thus, in 2019, more shoppers chose Black Friday to secure the products they wanted by buying online: 93.2 million versus 83.3 million on the following Monday. 

The trend was repeated in 2020 and 2021, showing that the two dates are now an integral part of a much more extended discount period stretching over the entire month of November. Although the two most successful days for online retailers remain Black Friday and Cyber Monday.  

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