Retailers push 'Cyber Monday' online bargains

Retailers who saw Thanksgiving holiday sales taper off as the weekend progressed fought back, stepping up online promotions on the day known as "Cyber Monday" to get consumers to keep shopping.

Online merchants peppered customers with e-mails Monday enticing them to visit their sites for holiday discounts, said Ken Burke, founder of MarketLive, the Petaluma-based e-commerce software firm.

"The e-mail volume today has just gone through the roof," Burke said Monday.

But after weeks of already heavy discounting both at regular stores and online, experts were doubtful that the day would give much of a lift to what is still expected to be one of the weakest holiday seasons in years.

Total retail sales for Friday and Saturday rose 1.9 percent compared with the same holiday period a year ago, but a shopping frenzy on Friday wasn't sustained the next day, according to ShopperTrak RCT Corp. a research firm that tracks traffic and retail sales at more than 50,000 outlets.

Sales rose 3 percent on Friday to $10.6 billion, but slipped 0.8 percent on Saturday to $6 billion. ShopperTrak expected a further pullback Sunday, estimating that total retail sales for the three-day weekend probably rose a modest 1 percent.

"Consumers were very deliberate about where they went and what they shopped for," said Bill Martin, co-founder of ShopperTrak. "They shopped for promotions, and there wasn't a lot of impulse buying."

Retailers must act quickly because the shopping season is shorter this year. There are only 27 days between Thanksgiving and Christmas, compared with 32 days a year ago, placing more pressure on merchants to make crucial sales.

In Sonoma County, many retailers were pleasantly surprised by the volume of traffic in their stores over the weekend.

J.C. Penney at Coddingtown Mall, which heavily promoted Black Friday discounts, had its biggest sales day of the year Friday, said store manager Mike Simmons. Saturday's sales softened somewhat, but shoppers returned in droves Sunday, he said.

"Overall, we exceeded our expectations," he said.

While other retailers saw plenty of shoppers, some saw a troubling trend.

"The traffic was comparable, but they were buying more smaller things," said Michael Sigala, manager of the Cost Plus in Santa Rosa.

Margie Haskin, saleswoman at Sur La Table cookware store in the Montgomery Village Shopping Center, said total sales are down about 10 percent for the year, and more holiday shoppers appear to be thinking small.

"I'm seeing people buy more small things, more practical things," Haskin said.

Analysts said consumers were waiting for retailers to cut prices even more before opening their wallets.

"People are expecting that deals will only get better as we approach the Christmas time frame," said Youssef Squali, an analyst at Jefferies & Co.

This wait-and-see approach is appearing in Web traffic patterns showing people visiting Web sites in large numbers but not always following through with purchases, said Burke at MarketLive.

"There's no question that people are still waiting to buy," Burke said. "They are still in research mode."

Visits to 150 Web sites managed by the Petaluma company's software were up 10 percent last week compared with a year ago, but total sales were flat, Burke said.

The percentage of visitors who actually bought merchandise online dropped, however, telling Burke that shoppers are using Web sites for research as much as commerce.

The Monday after Thanksgiving was dubbed "Cyber Monday" by the National Retail Federation trade group in 2005 to describe the unofficial kickoff to the online retail season -- when customers shop at their desks as they return to work. But with more deals advertised ahead of time and more consumers with high-speed Internet access at home, the day has lost some luster.

While "Cyber Monday" is not the busiest online shopping day of the year -- that day usually occurs later in December as shipping deadlines approach -- retailers stepped up their online deals Monday, offering discounts, free shipping and more.

Home furnishings Web site Cuddledown offered 20 percent off all online merchandise, while J.C. Penney used its site to advertise deep-discounted "Screen busters."

Overall, there were few technical problems reported during the day, but Gap and Old Navy sites were down for about 45 minutes in the morning because of heavy traffic, the company said.

Retailers disappointed by sales in their stores are hoping the traffic has migrated online.

Preliminary figures issued Monday showed mixed results. Nielsen Online reported that online traffic grew 10 percent year-over-year on Black Friday to 31.7 million unique visitors across 120 online retailers.

And online billing site Pay-Pal said transactions increased 34 percent and online payment volume rose 26 percent on Black Friday.

But Internet research company comScore said online spending on Thanksgiving Day and Friday was up 2 percent compared with a year ago. While slightly better than the flat growth comScore has predicted for the holidays, the increase is still drastically lower than last year's 19 percent growth.

For the holiday season to date, online sales are down about 4 percent to $10.41 billion, according to comScore.

The most likely candidate for busiest online spending day this year is Monday, Dec. 15, comScore spokesman Andrew Lipsman said, as consumers rush to make sure gifts can be shipped in time for Christmas.

"Cyber Monday is never really the heaviest online spending day," he said. "It (marks) the first significant spike in online spending, but then spending continues to build really until about the middle of December."

Staff Writer Kevin McCallum and the Associated Press contributed to this report.