By Spencer Soper
(Bloomberg)—The holiday shopping season is off to a strong start and retailers appear to be continuing the momentum today -- Cyber Monday -- the biggest online spending day of the year.
Shoppers spent $840 million online as of 10 a.m. in New York, up 17 percent from a year ago, according to Adobe Systems Inc., in line with its forecast of Monday sales to reach $6.6 billion. That adds to $43.4 billion spent online from Nov. 1 to Nov. 26, also an increase from 2016.
Amazon.com Inc. and Wal-Mart Stores Inc. are vying for holiday spending with competing deals on flat-screen televisions, toys and gadgets. Traditional retailers Macy’s Inc., Sears Holdings Corp. and JC Penney Co. have all shuttered stores, creating an opportunity for retailers to fill the void online, said Tom Forte, analyst at DA Davidson & Co.
“There’s a lot of market share out there to be had,” he said.
The large amount of spending from Thanksgiving to Cyber Monday likely benefited all retailers, but margins will be low due to steep discounts on must-have items for the holiday season, said Sucharita Mulpuru, an analyst at Forrester Research Inc.
“The challenge for retailers is winning mind-share beyond Thursday to Monday,” she said. “That’s where Amazon sucks up all the oxygen because shoppers know Amazon will have what they want in stock and can deliver it quickly.”
Amazon “handily won” online spending on Thanksgiving and Black Friday, according to a report by John Fetto, an analyst at Hitwise, which tracks 8 million shoppers on 20 million websites. The Seattle-based company had 55 percent of e-commerce transactions from the top 50 online retailers, with Wal-Mart a distant second at 8.8 percent, according to Hitwise. Amazon’s shares rose about 1 percent to $1,197.77 at 3:19 p.m. Monday in New York, after gaining 2.6 percent on Friday.
Shoppers continue to ditch the hassle of crowded stores and malls for the convenience of shopping online. Online spending during the November-December holiday season in the U.S. is projected to reach about $107 billion this year, more than 11 percent of total holiday retail sales -- the largest portion ever, according to EMarketer Inc.
Amazon, the world’s biggest online retailer, is projected to capture half of the e-commerce holiday spending growth, according to Bain & Co.
Cyber Monday became a phenomenon when e-commerce was in its infancy and most people had slow, dial-up internet connections at home. Online merchants noticed a spike in demand when shoppers returned to work where they had high-speed connections and shopping was less laborious.
Most people now have fast connections at home and on their mobile phones, yet Cyber Monday remains en vogue with shoppers conditioned to look for deals. It’s also a day shoppers look beyond big-ticket electronics like flat-screen TVs that dominate Black Friday sales and widen their focus to apparel, toys and beauty products likely given as gifts, said Lindsay Sakraida, director of content marketing at DealNews.
“Even though Black Friday is an online event, there are some people who are still turned off by the chaos of shopping over the holiday weekend,” she said. “Cyber Monday appeals to a different kind of shopper who doesn’t want to feel rushed.”
Toys, computers and televisions are among the products with the biggest Cyber Monday discounts, according to Adobe.
Updates with analyst’s comments in the sixth paragraph.
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