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Incentives Lure Shoppers To Net

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By ANNE D'INNOCENZIO, The Associated Press

Published: November 27, 2007

NEW YORK - After a long weekend of battling maddening crowds at the malls, the last thing most people want to do is go back to the stores after work to do more shopping.

To make it easier for the bruised, battered and otherwise shopped-out, retailers marked the official start to the online season, dubbed "Cyber Monday," with lots of come-ons to keep the cash registers ringing even as consumers return to work.

With an overall holiday season that is expected to be the weakest since 2002, and the number of new online customers leveling off, Web retailers are dangling even more incentives to keep them buying online, from fat discounts to free shipping without minimums.

On Monday, Wal-Mart Stores launched five days of specials only available at Walmart.com. The 150 deals is triple the number that was offered a year ago and include $60 quartz cocktail rings and $1,198 Samsung 40-inch LCD HDTVs. Toys R Us held a one-day online sale, and rival eToys.com launched a two-day sale.

"More and more retailers are using Cyber Monday as a promotional event," said Andrew Lipsman, senior analyst at comScore Networks, an Internet research firm.

Target Corp., Circuit City Stores, Sears Holdings Corp., Crate & Barrel, the Discovery Store and Overstock.com were among dozens of retailers offering free shipping Monday.

The incentives seemed to work, with many sites reporting surges in traffic that at least met expectations. Ice.com, an online jewelry site that offered 20-percent-off coupons, reported that traffic soared more than 70 percent and sales were up 82 percent as of Monday afternoon. Ice's CEO, Shmuel Gniwisch, had projected a 65 percent gain in business. Ebags.com, which offered a 20 percent discount on merchandise Monday, reported an almost 49 percent increase in sales compared with a year ago, beating expectations for 20 percent growth.

Raul Vazquez, chief executive of Walmart.com, expected 7 million visits to the site Monday, up from more than 5.5 million a year ago. As of midafternoon, plenty of items had sold out, including $448 1-carat diamond earrings, $38 toy workbenches from Step2, and $10 Thomas the Tank Engine toys.

There were some snags. The heavy traffic overwhelmed an e-commerce service offered by Yahoo, preventing consumers from completing purchases at thousands of Web sites Monday. The outages began late in the morning on the East Coast and continued for at least four more hours, Yahoo spokeswoman Kristen Wareham said.

The problems affected more than half of the roughly 40,000 sites that subscribe to Yahoo's "merchant solutions" service, which costs $39.95 per month plus a 1.5 percent sales commission.

Although the first Monday after Thanksgiving kicks off the online holiday shopping season, it's not the busiest day for retailers, according to comScore. Last year, the busiest online shopping day was Wednesday, Dec. 13, generating $667 million in sales. The Monday after Thanksgiving was the 12th busiest day in terms of sales for the 2006 holiday season.

Still, Ellen Davis, a spokeswoman for the National Retail Federation, which coined the term "Cyber Monday," noted that even though more than half of U.S. homes now have high-speed Internet access, a growing number of office workers feel more comfortable shopping online at work. This year, according to a survey conducted for Shop.org, the online arm of the NRF, 54.5 percent of office workers with Internet access, or 68.5 million people, are expected to shop for holiday gifts from work, up substantially from 50.7 percent in 2006 and 44.7 percent in 2005.

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