Black Friday Online Spending Up 16%, Facebook Influence Rises

Online spending rose much more than expected on Black Friday. Should the trend continue, holiday 2010 sales may be stronger than expected, especially if e-commerce is a proxy for overall retail activity.

comScore expected online sales to rise 12% this year. However, according to Coremetrics’ Third Annual Black Friday Benchmark Report, “Online sales were up a healthy 15.9 percent, with consumers pushing the average order value (AOV) up from $170.19 to $190.80  for an increase of 12.1 percent.”

Luxury Goods Make a Comeback: Jewelry retailers reported a 17.6 percent increase in sales. These affluent shoppers appear very willing to open their wallets.

Surgical Shopping: Consumers know what they want and where to get it. People are viewing 18.0 percent fewer products on sites than they did last year, suggesting that they are shopping with a specific item in mind and quickly moving on.

Social Shopping: Consumers appear increasingly savvy about their favorite brands’ social presence, and are turning to their networks on social sites for information about deals and inventory levels. While the percentage of visitors arriving from social network sites is fairly small relative to all online visitors—nearly 1 percent—it is gaining momentum, with Facebook dominating the space.

Aside from the unexpected surge, the data show just how much Facebook has changed the world of e-commerce. It now carries one-quarter of all online display ad space, and these units are sold at a sharp discount to the amount charged by the three major online portals and other large sites. The low cost of Facebook advertising likely pressuring display spending across the internet.

Facebook now is becoming a major influence on holiday sales as its tens of millions of members share information about products and deals with one another.

This may be the first retail season in which social media begins to take away some of the power of large online e-commerce sites such as Amazon.com where shoppers go for both purchases and opinions about gifts.

Douglas A. McIntyre