Retailers may have taken a hit on Black Friday, but they are banking on Cyber Monday and Gray Thursday to deliver a much-needed boost in holiday shopping season sales.
Sales on “Cyber Monday,” the first day for many people to be back at work after Thanksgiving weekend, jumped about 20 percent Monday, compared to a year ago, as consumers seemed to be shifting their focus to online shopping. But consumer willingness to spend online could be weakened by a Supreme Court action Monday that gives states more power to collect online sales tax.
That comes on the heels of poor sales numbers on Black Friday, the day after Thanksgiving and the traditional first day of Christmas shopping. The National Retail Federation reported Sunday that overall sales were down versus the same day in 2012, a cause for concern among some retailers who fear there will be weaker demand this holiday season.
But retailers aren’t panicking.
“Retailers still have a few tricks up their sleeves and they’ll figure out great ways to attract new customer dollars,” said Kathy Grannis, spokeswoman for the National Retail Federation. “Retailers can make up a lot of ground in the coming days.”
The retail group reported that the average shopper spent $407 from Thursday through Sunday, which was down slightly from the $423 average for last year’s four-day “weekend.” Total spending over the weekend was $57 billion.
Despite the poor turnout on Black Friday, the retail group still expects overall holiday sales to increase 3.9 percent this year to $602 billion.
Many retailers will offer free gift cards to entice consumers to buy certain products, Ms. Grannis suggested. She pointed to Target’s offer of a free $100 gift card to customers who purchased an iPad Air last weekend, as an example. She also said that free shipping is popular among consumers.
Part of the reason for the low turnout on Black Friday is that consumers started shopping earlier this year, Ms. Grannis added. Many already had their shopping done by Nov. 15, according to another NRF survey.
“The fact that people started shopping a little earlier this year cut into the fact that there might not have been a lot of reasons to shop this year on Black Friday,” Ms. Grannis said.
Some market analysts also suggested that the increasing number of stores that open on Thanksgiving, and offer discounts and other incentives to shop on that day, has moved some of Black Friday’s specialness to what has become known as Gray Thursday — Thanksgiving Day itself.
“We know that Gray Thursday was somewhat successful,” said Chris Christopher, U.S. economist at IHS Global Insight. “So those shoppers that went out on Gray Thursday weren’t out in full force on Black Friday.”
Meanwhile, holiday shoppers are shifting their focus online. The retail federation reported that 59 million people, or about four in 10 consumers, shopped online during the Black Friday weekend. The average shopper spent $177 online, which covered about 44 percent of their overall holiday shopping budget.
Furthermore, IHS Global Insight found that online shopping jumped by 13 percent this year over 2012.
Meanwhile on Cyber Monday, the Supreme Court declined to consider the appeal of an online sales-tax case being brought by Amazon and Overstock against New York state.
The justices let stand a lower-court decision that means New York will be allowed to continue forcing websites to collect sales tax if they use affiliates from that state to refer people to their website. Because most websites use affiliates, this means that many online shoppers from New York could end up paying sales tax.
The implications are much bigger than just New York. Legal and market analysts said Monday that New York’s success means other states will follow suit and begin collecting online sales tax. A nationwide law that would let states require that online stores collect sales taxes from their residents is still being debated in Congress, but this ruling is likely to make the practice much more widespread even before Congress says so.
• Tim Devaney can be reached at tdevaney@washingtontimes.com.
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