It was back in the pre-recession days of 2005 that retailers began noticing a new trend: sales in the still fledgling e-commerce industry would spike on the Monday after the long Thanksgiving weekend. The theory that gained traction was that millions of Americans, fresh off a long weekend spent window shopping, would go back to their otherwise-productive desk jobs and, armed with high-speed internet connections that were still a rarity in most homes, log on to buy what they had seen in stores.
The National Retail Federation was quick to coin the term "Cyber Monday," and a marketing holiday was born.
Fourteen years later, Cyber Monday has grown to become one of the most critical shopping events of the year for retailers. In 2019, Adobe Analytics is predicting consumers are on track to spend $9.4 billion ー 19 percent year-over-year growth ー which is in addition to the record $7.4 billion spent online on Black Friday this year. When all is said and done, this Cyber Monday could break the record for biggest online shopping day in U.S. history, blowing past Amazon Prime Day and second only to Alibaba's Singles Day in China.
"This is going to be a healthy holiday season," said Steve Sadove, the former chairman and CEO of Saks Fifth Avenue and a current senior adviser to Mastercard.
Sadove echoed comments made by Jharonne Martis, the director of consumer research for Refinitiv, who told Cheddar last week that brands that are able to provide a compelling "value proposition" are the ones that are succeeding in the new world of retail: "The consumer has the power," he said.
Big-box stores like Target and Walmart that have invested heavily in their omnichannel experience are one way that value proposition has materialized. "Sometimes you want to be in a store, but a lot of times you just want to be buying off your phone," Sadove said (indeed, nearly 40 percent of all e-commerce sales on Black Friday came from mobile).
Luxury brands are successful when they can scale (see: LVMH buying Tiffany). Digitally native brands that "tell a story," that differentiates their products are expanding, a rare bright spot in brick-and-mortar retail (see: Allbirds planning to open 20 new stores next year). On the low-end, discount retailers create value from the in-store "treasure hunt" experience (see: Ross Stores, Burlington, TJ Maxx all topping their most recent earnings estimates).
The losers end up being niche, over-leveraged brands that can't compete in the fractured marketplace, Sadove said, referring to the recent bankruptcy of Barney's as an example. Department stores in particular need to create "unique experiences to bond with consumers ... so they don't want to shop anywhere else," he said, given that in many cases their vendors are now also their competitors online.
Between the surge in mobile shopping, the death of a department store that epitomized mid-aught consumer culture, and the explosion of Amazon, Cyber Monday 2019 has morphed into something entirely different from its origins back in the 2000s. And it's likely just the beginning.
"This is the year that will go down in the history books as the tipping point between digital and real world," said Jon Reily, an industry veteran, in an interview with Retail Dive.
"We knew it was coming, and 2019 is the year."