Analyst Angle: Making the most of Holiday 2009

Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
Do you remember back in 2005 when the term Cyber Monday was coined? Retailers noticed a large spike in online purchasing the Monday following Thanksgiving. Retailers thought that this was a result of consumers not finding what they were looking for during their Black Friday outings at the mall or local retailers and then going to the Web in search of better bargains after the weekend ended. Often this shopping was done once consumers got back to their high-speed internet connections at work on Monday. So much for a productive day in the office!
Over the last four years, retailers have taken advantage of this trend to promote special Web-only deals to drive shoppers online. It appears to be working – and not just on Cyber Monday. Both retailers and online consumers have become more sophisticated. Retailers have been pushing their Black Friday deals online and consumers are responding by starting their online holiday shopping a bit earlier. As one example, let’s look at how this trend applies to wireless shoppers.
In 2008, Cyber Monday traffic on wireless carrier sites was up 159% compared to traffic on Black Friday. This year, Cyber Monday traffic was up only 19% compared to Black Friday – but traffic overall compared to 2008 increased 139% (on average from the Wednesday before Thanksgiving to Cyber Monday). So, this shows us two things: 1) there were many more wireless shoppers this year and 2) they weren’t waiting until Cyber Monday to start looking for deals.
In Q3, prior to the kick-off of the holiday season, Compete surveyed over 1,000 wireless shoppers and asked them about their Holiday 2008 purchases and their planned Holiday 2009 purchases. We found that in 2008, 61% purchased consumer electronics during the holiday season, but only 42% plan to do so this year. Also, 48% of wireless shoppers anticipate spending less on consumer electronics this year as compared to last year. However, the bright spot in consumer electronics appears to be cellphones. Fourteen percent of wireless shoppers plan to purchase a cellphone during the holidays this year and 41% of those plan to do so as a gift.
That data shows what consumers were thinking going into the holiday season. Now let’s look at what they did during the holiday kick-off Thanksgiving week (specifically Black Friday and Cyber Monday). According to Compete.com (powered by TNS Compete’s clickstream panel – a behavioral panel which tracks the online behavior of millions of consumers across the U.S), overall visitors to the carrier sites (AT&T, Sprint, T-Mobile and Verizon Wireless) were up over 20% year-over-year, so it isn’t surprising that we see increases in visits every day during the long shopping weekend. However, what is interesting is that some of this wireless shopping appears to have shifted from Cyber Monday to Black Friday.
Daily traffic volumes are 40% to 203% higher than last year. Consumers are positively responding to carriers’ aggressive holiday promotions (including AT&T’s free phone promotions, Sprint’s Any Mobile Anytime plan, T-Mobile’s new unlimited plans, and VZW’s 24-hour sales). But are they actually making purchases?
Although online gross add orders increased on both Black Friday and Cyber Monday, from 57% to 77% for Black Friday and from 23% to 123% for Cyber Monday, they didn’t increase as much as traffic did. The largest growth came from existing customers in the form of handset upgrades with many responding to new phones including the Motorola Droid, T-Mobile myTouch, HTC Hero, and Palm Pixi (and many of these upgraders were previous holiday purchasers).
So how can the wireless carriers finish the 2009 Holiday season strong? What should they be thinking about regarding future Black Fridays and Cyber Mondays?
–Make it easier for consumers to give gifts, including activated phones, gift cards, accessories, etc.
–Target customers, as a large percentage of Black Friday and Cyber Monday sales are upgrades.
–Continue to promote both Black Friday and Cyber Monday to capitalize on consumers who are conditioned to shop throughout the holiday weekend.
Karen Parker can be contract at: kparker@compete.com.