Dec 82010

The Post Cyber Monday Lull

Every year there is a certain snarky contingent of the populace that dismisses Cyber Monday as just marketing hype since, "it's not even the biggest online shopping day of the year."  Well, let's all hope that holds true in 2010 as the performance data has definitely taken a turn for the worse in the ensuing days.

RKG was just one of many firms in the marketing business who enthusiastically reported on very strong Black Friday and Cyber Monday figures, but the din of data releases has grown much quieter in the last week.

In our post, George was quick to caution that "we may have conditioned consumers to shop earlier, hence these big gains year-over-year are simply cannibalizing sales that would have come later."   This is a notion we have touched on before, but this year's results have been particularly dramatic:

Across a representative sample of RKG clients, this Monday was the first day since at least the beginning of November where sales did not grow year over year.   In the 20 days before Cyber Monday, we had only seen two where Y/Y growth was less than 15%, but 6 of the next 7 days showed growth of less than 10%.  Perhaps most concerning, in 2009 we saw just a 3% decline in revenue from Cyber Monday to the next Monday.  This year, that decline was 31% on a 15% decline in traffic.

Comscore has put out a release pointing to a "Cyber Monday Hangover," but their year over year growth figures have generally shown more conservative gains from the beginning in comparison to what many of us on the front lines have seen.  Comscore has Cyber Monday spending up 16%, with the full week up just single digits.  Bear in mind, RKG is looking at competitive PPC sales, while Comscore is looking at all site, so it is a bit apples and oranges.

The big question is obviously whether or not we will see a second surge in demand or if, as in the recession-preceding 2007 holiday season, we go out with just a whimper.  The Cyber Monday weekend marks a relatively rare period where promotions are nearly ubiquitous and media attention lights a fire under consumers to take advantage of those offers.  While individual sites may find profitable results with promotions between now and the end of the year, there won't be the same unifying impetus to shop, perhaps until we begin running up against shipping deadlines.  In that respect, it seems unlikely that we will see a sudden jump in year over year growth, but we shouldn't rule out a more steady return to pre-Cyber Monday levels.

While we would all love to see 40-50% revenue growth for the full holiday season, that's probably a bit optimistic.  The economy is still in a fragile state as the most recent Labor Department employment report highlighted.  While seasonal retail hiring has been up this year, it's generally believed that consumers are driven by their long-term expectations of future income and, while a significant portion of the population may be more assured they won't be laid off this year, there is still enough uncertainty out there for many to keep the purse strings tighter than advertisers would like.

Still, we can take some solace from an ICSC report that states consumers' holiday shopping completion rate is lower at this point than in years past.  In a couple weeks, we'd like to think we'll be describing the "Procrastinators Peak."  We'll work on that name in the interim...


7 Responses to "The Post Cyber Monday Lull"
RM says:
Mark, Great article and very timely. Am I reading your chart correctly? You're showing up to 40% YOY growth in SEM sales (from collective RKG retailers?) both at the beginning of Nov and over the holiday weekend? Why does that seem beyond reality to me? Can you help define the data sources?
Mark Ballard says:
Sure. This sample removes some of our smaller clients and uses a client weighted truncated mean to eliminate some of the data noise (although it is still pretty spiky). This does emphasize the smaller clients that remain in the sample compared to a dollar weighted view, but doesn't significantly shift the figures. Our median Y/Y sales gain from the beginning of November to Thanksgiving was 22% in the data above and closer to 14% in a dollar weighted view for the same clients. In short, no clients were added or removed from the sample based on good or bad performance.
James says:
Good article. My year over year campaign performance mirrors your graph, starting around 11/15. The week of Cyber Monday was superb. This week continues to be a dissapointment. I had high hopes the year over year sales increases I saw for Cyber Monday would continue. Maybe next week...
Alex says:
Hey Mark, That's good analysis. Thanks for the post.


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