How Cyber Monday blew past Black Friday to become the biggest shopping event of the holiday season
- Cyber Monday is the biggest holiday-shopping day of the year by sales, outpacing even Black Friday.
- It started in the early 2000s as consumers shopped online from work, according to a new podcast.
Cyber Monday has become the biggest single shopping day of the holiday season, outpacing Black Friday.
Dan Hess is one of the people retailers and shoppers can thank for that.
In 2002, Hess was working at Comscore, a company that provides data to advertisers about consumers' internet habits.
Hess and his team were poring over sales data for the days after Thanksgiving, he told Insider Intelligence analyst Andrew Lipsman on a recent episode of the "Reimagining Retail" podcast. That year included a jump in sales on Black Friday, as expected.
But there was a smaller bump after the weekend ended, too.
"We're looking at the Monday data, and online shopping had lit up, quite appropriately, like a Christmas tree," Hess said on the podcast. "And we knew at that point that we had stumbled upon a pretty major disruption in consumer behavior."
As consumer behavior shifted, retail analysts like Lipsman and Hess took notice. But the shopping holiday wouldn't have been what it is today without retailers eager to make it a success.
The Cyber Monday origin story shows how savvy marketing helped turn a blip in online-sales data into a shopping event that now results in billions of dollars in sales.
Consumers decided when to shop based on when they had the best internet access
In 2002, shopping online required high-speed internet access — a service that less than 10% of the US population had at the time. Many consumers postponed their first online holiday purchases until they clocked into work on Monday, leading to a rise in online sales for the top online retailers of the time, like Amazon and eBay.
"You try shopping on a 56K dial-up connection," Hess said, referring to the home internet connection that many Americans had. "Now compare that to going into work and sitting at your desk, and all of those challenges go away."
The phenomenon generated attention — and a quote from Hess — that year in the press. There were also multiple names for the day: Hess and Comscore initially referred to the spike as "Black Monday," a reference to Black Friday and its sales, which Wall Street analysts said helped make retailers profitable during the holidays.
But it wasn't until 2005 that it was dubbed "Cyber Monday" by the National Retail Federation.
That year, shop.org, NRF's online arm, issued a press release in November declaring: "'Cyber Monday' Quickly Becoming One of the Biggest Online Shopping Days of the Year."
"On Cyber Monday, consumers set their sights on surfing for holiday gifts and shopping online," Scott Silverman, then the executive director of Shop.org, said in the release. "This year, online retailers will be capitalizing on the increased traffic by offering special promotions and discounts."
Lipsman, who started a job at Comscore right after the press release came out, remembers that the interest from reporters, analysts, and others in the burgeoning sales holiday was huge. "Our phones were ringing off the hook," he told Insider.
The following year, retailers started calling the day Cyber Monday in promotions.
On Cyber Monday 2006, visitors to Walmart.com could take advantage of specials on a portable DVD player and a Mega Bloks replica of the Flying Dutchman ship from the "Pirates of the Caribbean" movie series.
Despite slower growth, Cyber Monday will still be the biggest shopping day this year
Cyber Monday got a sales boost in 2008 and 2009 as the Great Recession pushed consumers to seek more deals on their holiday shopping.
In 2010, the day surpassed Black Friday as the holiday-shopping day with the most sales, according to Insider Intelligence. In five years, it had gone from obscurity to the highest-grossing shopping day of the holiday season.
Cyber Monday retains that distinction to this day, even though it attracts fewer shoppers than Black Friday. In 2019, for instance, 93.2 million people bought something on Black Friday, while 83.3 million shoppers made purchases on Cyber Monday, according to NRF.
In 2022, Black Friday sales growth is expected to slow from previous years.
Insider Intelligence is projecting a 3% sales growth rate for Cyber Monday in 2022. That's slower than past years, when sales generally grew between 20% and 30%.
But the holiday is still projected to attract sales of about $11.8 billion, more than the $9.8 billion estimated for Black Friday, according to Insider Intelligence. Last year, Insider Intelligence estimated that Cyber Monday spending would total $10.7 billion.
In 2002, the yet-to-be-named Cyber Monday generated $250 million in sales, according to Lipsman.
That growth has come as companies like Walmart, Amazon, Target, and Kroger have built up their online operations.
At most major retailers, e-commerce has gone from being a side project to a core part of the business, Hess said.
"I think back to those early days of online shopping when the '.com' division of a retailer was in its own silo and the stores couldn't talk to the e-commerce operation," Hess said. "Those things have, for the most part, gone away."
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