Transcripts

Cyber-Monday Is Expected To Be Sluggish

SUSIE GHARIB: Today, the first Monday after Thanksgiving, has come to be known as cyber Monday, when many consumers shop online after hitting traditional stores over the weekend. In recent holiday seasons, online sales grew at a double digit pace. But as Suzanne Pratt reports, that probably won't be the case this year.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: After a long holiday weekend, many workers are busy back at their office computers. Busy? Yes. Busy working? Not necessarily. It is after all cyber Monday and the temptation of those deals in your inbox may be hard to resist. I haven't cleaned out my personal email since last Wednesday. And the hundreds of offers from stores that I sometimes frequent is pretty scary. That desperation is not surprising, given that it's been well documented that this holiday season is likely to be the worst for retailers in decades. Internet analyst Jim Friedland says while the online segment may be more resilient, it's not immune to economic trends.

JIM FRIEDLAND, INTERNET ANALYST, COWEN AND CO.: Everything in online retail looks bad as well. Relative to traditional retail, it looks great. But, we're still expecting a very, very poor season.

PRATT: The Internet tracking firm comScore predicts online spending for the November-December holiday period will be flat. That would be a big disappointment given last year's 19 percent jump in sales. But Forrester Research is far more upbeat. It's looking for a 12 percent increase in online sales this year, although that is its weakest holiday sales forecast to date. Forrester's Patti Freeman Evans says online shoppers are different.

PATTI FREEMAN EVANS, VP, RESEARCH DIRECTOR, FORRESTER RESEARCH: Online is a little bit insulated from the overall economic impact because people are more affluent. They believe that they actually can get a better deal and because there's still some new growth happening there.

PRATT: With online shopping accounting for only about 5 percent of the retail pie, it's true there's plenty of room for growth. But, it also means many would-be customers are still buying stuff the old fashioned way. As for the deals consumers have come to expect, it turns out they're less likely to show up online.

FRIEDLAND: One of the great things about the online retail model is that it's very much real time and many of the online sellers don't actually hold a lot of inventory, so the possibility for that is much smaller.

PRATT: Cyber Monday is not typically the busiest shopping day for online retailers. December 15 usually holds that honor. Sales on that day generally get a boost from the end of free shipping promotions and other last minute offers. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.