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Online shopping grows after US holiday store traffic ebbs

Nov 27 2012, 18:50   |   By Reuters

Internet sales continued to grow through the US Thanksgiving holiday weekend, feeding overall transactions even as traffic to stores likely slowed after a strong, early start.

In the latest sign of the growing importance of Internet-based retailing, comScore Inc said "Black Friday" online sales topped USD 1 billion for the first time, while IBM said online sales rose 16.9 percent year-over-year on Saturday.

Staying open on Thanksgiving became more widespread this year as retailers such as Target Corp , Sears Holdings Corp and Toys R Us Inc joined in, while others including Wal-Mart and Gap Inc either extended their operating hours or had more stores doing business.

Traditionally, stores had waited until Black Friday, the day after the US Thanksgiving holiday, to make their big push.

IBM, in a survey, said 24 percent of shoppers used a mobile device to visit a retailer's website on Black Friday, and 25.5 percent did so on Saturday. Overall sales, however, were likely to have flattened slightly.

The number of consumers using their mobile device to make a purchase was up over Black Friday, reaching 16.7 percent versus 16.3 percent, IBM said.

"Overall Saturday sales are probably up 1 or 2 percent after the 3 or 4 percent on Thursday and Friday," said Steve Krenzer, chief executive of shopping comparison website PriceGrabber.

"Sales for the overall weekend will be up 3 percent, but some of Thursday and Friday's gains will come at Saturday's expense," he said.

Krenzer said that this year, 13-14 percent of consumers indicated they would spend more this holiday season against 80 percent or more who said they would spend the same or less than last year.

"When you see strong sales on Thursday and Friday, you know it is going to come from later in the weekend or later in the season," he added.

Consumer spending accounts for about 70 percent of US economic activity.

Hard data for sales and traffic trends for the weekend will not be available until later in the day and week, but initial readings suggested that for all the early Thanksgiving deals, those extra hours may not have led to a huge boost in sales.

The National Retail Federation expects sales in November and December to rise 4.1 percent this year, below last year's 5.6 percent increase.

As the spending pool contracts, it becomes more important for retailers to strategize as they battle each other, rather than seeing a growing pie in a season when they can make a third of their annual sales and 40 to 50 percent of their profits.

"The early opening is very important to gain or maintain market share in the competitive landscape, but it will not generate a breakthrough spike in year-over-year spending for the overall holidays," PriceGrabber's Krenzer said.

Analysts at Shoppertrak, which analyzes store traffic, said though the number of shoppers visiting physical stores rose 3.5 percent on Black Friday, retail sales fell 1.8 percent that day.


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