Christmas comes early for retailers

But stores must beware too much discounting

By Published on .

Credit: Bloomberg

Retailers got a merry start to the shopping season with a record-breaking Cyber Monday last week. But if marketers want to maintain their sales cheer, they'll need to revise their email strategies and possibly lighten up on the discounts, experts warn.

By the end of Cyber Monday, shoppers spent $7.9 billion, a 19 percent rise over last year, according to Adobe Analytics. Amazon said it also hit a record for products sold on that day.

Overall holiday shopping could increase as much as 4.8 percent to
$720.9 billion, predicts the National Retail Federation.

Consumers may have been buoyed last month in particular by colder-than-usual temperatures in the Northeast.

"Ask any retailer—getting cold in November is the ideal scenario," says Evan Gold, executive VP of global partnerships and alliances at Planalytics, which measures the impact of weather on business.

However, continual email blasts from retailers during the Black Friday weekend and through last week could be overwhelming shoppers, says Brigitte Majewski, an analyst at Forrester Research.

"Brands are still not understanding that they're not the only email, the only ad, in town," says Majewski, noting that retailers need to be more targeted in their emails, which often just promote deep and desperate discounts.

"Some retailers might find unsubscribe rates going up if they're not careful," she says.

In addition, offering promotion after promotion is training consumers to never expect full price, a strategy that growing direct-to-consumer brands such as Allbirds and Away are steering clear of. By contrast, such startups are promoting their already low-priced sourcing model and limited-edition offerings in order to gain appeal.

On the bright side for retailers, the option of "buy online, pick up in store" is performing well—it was up 65 percent on Cyber Monday, Adobe found. Executives from brands including Target and Kohl's have highlighted such options as strengths on recent conference calls: At Target, in-store pick ups accounted for 15 percent of digital sales in the third quarter.

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