Christmas shopping is big business for retailers, online and otherwise, but Cyber Monday sales are supposed to spur online shoppers in particular.

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Introduction to How Cyber Monday Works

Imagine an agonizing eternity of furious beeps and screeching chimes -- then cue the wailing banshees and thumping zombies. That's what shoppers used to have to endure if they wanted to make purchases online from home. Dreadful. Back in the days of dialup, U.S. shoppers who wanted to partake in seasonal sales yet refused to brave the mall madness that ensues on Black Friday -- the day following Thanksgiving -- had to still spend their holiday weekend waiting for their Internet connection to cooperate. That is, until many holiday shoppers -- and the retailers marketing to them -- realized there was another way. Why not just hold off on offering and shopping for online sales until everyone's back at their desks on Monday with speedy broadband connections?

After all, it's not surprising that people want to avoid the early bird sales and massive crowds that one must often face on Black Friday. Competition for products like discounted electronics can get fierce, but when it comes to stuff like the season's hottest toys, it's positively cutthroat. Take the deadly incident at a Wal-Mart in 2008. One person was trampled to death and 11 more were injured when a mob of 2,000 shoppers broke down the store's doors and stormed inside [source: USA Today]. Little wonder some people prefer to shop online.

Although it isn't always the busiest shopping day of the year, online retailers offering Cyber Monday promotions can generally expect a good take for their efforts. But how did Cyber Monday officially get going?

What's in a name?

Black Friday and Cyber Monday aren't the only two holiday shopping days nicknamed by retailers and industry trade groups. In 2010, American Express cooked up Small Business Saturday in support of local businesses, and in 2011, Google, Facebook and Twitter supported those efforts through advertising credits. Some people also refer to a Green Monday when talking about the holiday shopping season. In 2010, it fell on Dec. 13. That day is named after the old greenback, since it's often a contender for the No. 1 most profitable day for stores.

The Origin of Cyber Monday

The term "Cyber Monday" was dreamt up in 2005 by a marketing team at Shop.org, a division of the National Retail Federation. The idea was to provide online retailers with a catchy hook to match the brick-and-mortar shopping frenzy fueled by mention of Black Friday savings. At the time, Cyber Monday wasn't the busiest online shopping day of the year -- it was more like the 12th -- but it's become an increasingly popular day to shop since then, even with the proliferation of high-speed Internet into most American homes [sources: National Retail Federation, Hof].

Cyber Monday starts the holiday shopping season for lots of online retailers, and in many ways, it almost immediately became a self-fulfilling prophecy. Lots of consumers were already taking part, shopping through the Black Friday weekend and into the next week, and the media seized on the concept in a big way the first year it was introduced. Many online retailers saw an unexpected jump in sales, likely as a result of these free marketing efforts. By coupling the catchy phrase with sales and promotions, Cyber Monday has since served to push sales up and boost increased online shopping throughout the holiday season.

Nowadays, even though Cyber Monday is just a slice of the holiday shopping pie, it ranks pretty well. Find out how well on the next page.

A Global Phenomenon

Online shopping on Cyber Monday hasn't just caught on in the United States. In the United Kingdom, Canada, France, Portugal and New Zealand, among other nations, Cyber Monday has become a promotional event as well.

The Performance of Cyber Monday

The days leading up to Christmas are crucial for retailers in the United States, which rely heavily on fourth quarter earnings to meet annual sales goals. In 2002 and 2003, online retailers started to notice an upsurge in sales on the day that would later be dubbed Cyber Monday [source: Smith]. Apparently, consumers weren't always finding the deals they wanted in stores, so come Monday morning, they would peruse for presents at work. Or perhaps they were still visiting stores over the weekend, but chose to hunt the Web later to find the best deals rather than buy in person.

Whatever the case, according to a digital tracking company called comScore, from 2005 onward Cyber Monday sales have inched progressively higher, from $484 million in 2005 to more than $1 billion in 2010 [source: comScore]. In fact, 2010 was the first year Cyber Monday cracked the billion dollar mark. It was also the busiest online shopping day of the year -- $1.028 billion was spent making retail purchases over the Internet. Dec. 13 was next with $954 million, and Dec. 6 third, at $943 million [source: comScore].

And were all those Cyber Monday shoppers logging on while on the clock? According to comScore, the numbers have shifted a bit over the years. In 2009, 41.6 percent of shoppers logged in from home and 52.9 percent were making purchases from work. But by 2010, that balance had budged somewhat, and about 4 percent of the shop-from-work crowd was now plugging in credit card numbers from the comfort of home [source: comScore]. Despite those declines, one interesting theory as to why work numbers remain high regardless of the increase of at-home high speed Internet is that employees enjoy being able to shop for loved ones without having to worry about the nature of the gifts being discovered.

Get more links about online shopping on the next page.

Lots More Information

Related Articles

Sources

  • "Attractive Discounts Bring Deluge of Buyers to Retail Sites on Cyber Monday." Dec. 4, 2008. (Oct. 14, 2011) http://www.comscore.com/Press_Events/Press_Releases/2008/12/Cyber_Monday_Discounts
  • Barbaro, Michael. "Online sales take off on 'Cyber Monday'." New York Times. Nov. 30, 2005. (Oct. 14, 2011) http://www.nytimes.com/2005/11/30/technology/30iht-cyber.html?scp=12&sq=cyber%20monday&st=cse
  • "Billion Dollar Bonanza: Cyber Monday Surpasses $1 Billion in U.S. Spending as Heaviest Shopping Day Online in History." comScore.com. Dec. 1, 2010. (Oct. 14, 2011)http://www.comscore.com/Press_Events/Press_Releases/2010/12/Billion_Dollar_Bonanza_Cyber_Monday_Surpasses_1_Billion_in_U.S._Spending
  • Bradley, Tony. "Is It Too Early to Start the 2011 Holiday Shopping Season?" PCWorld. Oct. 7, 2011. (Oct. 14, 2011) http://www.pcworld.com/businesscenter/article/241391/is_it_too_early_to_start_the_2011_holiday_shopping_season.html
  • comScore. http://www.comscore.com/
  • CyberMonday.com. (Oct. 14, 2011) http://www.cybermonday.com/
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