Web-only firms perform best on Black Friday

December 1, 2008

Web-only firms perform best on Black Friday It’s already clear that traditional retailers had disappointing (if expected) Black Friday sales. Now its emerged firms with real-world physical stores generally didn’t share in the success of online-only stores.

As Dave Parrack wrote today, stores such as Amazon reported increased business over 2007, while PayPal payments were up by around a third. However, another study suggests not everyone shared equally in this online bonanza.

Overall, traffic to retail sites fell five percent on Black Friday compared to last year, while spending was only up by one percent. Once you take into account inflation, that’s actually a drop.

While eBay and Amazon are the only firms in the 10 busiest sites from Friday which don’t have physical stores well, most reports suggest that it was mainly internet-only firms whose numbers grew compared to last year.

One firm bucking the trend is Circuit City, which had the largest spike in traffic (that is to say a rise on last week rather than last year). Given the store closures and bankruptcy, that may be because people assumed it would be a good bet for some serious discounts.

Many analysts believe online sales will be better today because of the so-called ‘Cyber Monday’ effect. That’s supposedly where people take advantage of internet deals when they return to work and can use high-speed connections. As Dave said, that seems an unlikely effect given how common broadband is among home users now.

It’s just a hunch, but I think ‘Cyber Monday’ might actually be more down to people who’ve had an extended break for Thanksgiving feeling downcast to be back at work and cheering themselves up by sneaking some online shopping into their office hours. If that is the case, you might expect to see a small decline this year simply because, with the economy in rough shape, the threat of layoffs might mean people are less willing to risk being caught shopping rather than working.

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