Local online retailers are gearing up for one of their biggest days of the year in what is shaping up to be a record season for internet shopping.
Tomorrow is Cyber Monday, which Wilkes business professor Anthony Liuzzo called ‚??the opening salvo for the online holiday retail season.‚?Ě Businesses frequently mark the day ‚?? the online equivalent of Black Friday ‚?? with discounts on products or free shipping and other customer incentives.
Liuzzo and other retail industry watchers are predicting businesses selling gifts online will see strong sales tomorrow, and local online retailers are working extra hours to prepare.
Retail industry group National Retailers Federation forecast online holiday sales will grow 12 percent over 2011 this season to $96 billion, its most optimistic forecast since the recession. If the group‚??s forecast holds true about $1 in every $6 spent on holiday purchases will be spent online.
Liuzzo, director of the MBA program at Wilkes University, has tracked online sales since early 2000s. He‚??s predicting 15 percent growth in online purchases this year, the same year-over-year increase as in 2011.
It‚??s difficult to compare annual gains in the online retail market since it was in its infancy only a decade ago, when 100 to 200 percent annual growth was common, but given the size of the market today, 15 percent growth is ‚??a pretty big deal,‚?Ě Liuzzo said.
Liuzzo said Cyber Monday is the first of several Mondays in December that are key to online retailers. Monday is the most popular day to shop online, Liuzzo said, and yes, it‚??s because workers are browsing ads at work.
‚??You can actually see the number of clicks, the number of sales across the U.S., going up as lunchtime approaches,‚?Ě he said.
Sales increase steadily until the second Monday before Christmas, called Green Monday or in recent years Free Shipping Day, which is often the busiest day of the year for internet commerce.
Local online retailers are preparing for the expected onslaught by hiring extra workers and preparing extra product to fill orders.
West Pittston-based specialty foods company iGourmet.com hired close to 400 seasonal workers to prepare orders this holiday season, an increase over the more than 300 it hired last year.
Spencer Chesman, iGourmet owner and CEO, said the company is anticipating sales will be up 20 percent over last year.
‚??Our October was 37 percent over last year, so it could be considerably more,‚?Ě he said. ‚??I think the market‚??s come all the way back.‚?Ě
Chesman said iGourmet struggled during the downturn that began in 2007 but has refocused itself on ‚??smart growth‚?Ě and is now bouncing back. Part of the shift has been increasing the number of products offered and focusing on hot specialty items like organic foods and gluten-free items, Chesman said.
‚??Our product line is bigger than ever; we‚??ve actually added about 1,000 products since the lows of the Great Recession,‚?Ě he said. ‚??The thought behind that is that selection is a big reason why people would shop with us and we strive to have everything a gourmet shopper could possibly look for at a one-stop shop like iGourmet.‚?Ě
Chesman said Cyber Monday is a key component of its annual sales and sales that day could exceed an entire off-peak month.
‚??It‚??s a phenomenon that‚??s been growing every year,‚?Ě he said. ‚??I think when it first came out it was something of a gimmick, but I think now it really launches the Christmas season and it‚??s turned out to be one of our biggest days of the year.‚?Ě
Neil Edley, chief innovation officer for Sugar Plum in Forty Fort, said the gourmet chocolate company is expecting ‚??very high traffic‚?Ě on its website Monday.
The website has become the company‚??s main ‚??sales force‚?Ě since it discontinued a paper catalog, Edley said. The company also sells chocolates at about 900 retail locations around the world.
Because the company‚??s chocolates are made to order, Edley said it‚??s difficult to prepare for a shopping holiday like Cyber Monday, but he said the company will offer several Web specials and unveil new products on Monday.
As with iGourmet, the exact offers will bekept secret until early Saturday morning in order to drive traffic to the site beginning on the weekend.
‚??We‚??re just trying to keep everybody in suspense,‚?Ě he said.
Edley said Sugar Plum also will hire seasonal staff to help fill Christmas orders, but declined to say how many.
Customers in the growing online market are demanding more from retailers including free shipping or shipping incentives. Sugarplum and iGourmet both hinted shipping incentives would be part of their Cyber Monday offerings, which will cut into their profits.
Both deal in perishable goods that must be shipped quickly and in special packaging.
The dynamic led Bob Scocozzo, owner of Mia Bella candles maker Scent-Sations Inc. in Wilkes-Barre, to rethink his shipping cost structure. Scocozzo sells candles through a website direct to consumers as well as to distributors, who often place large orders at once.
‚??What we found was people were going all the way to the end and then cancelling their order (after seeing the price of shipping),‚?Ě Scocozzo said.
Scocozzo offers $5.95 shipping on all candle orders through his website. He loses some revenue on large, heavy orders to distributors but said he‚??s made it back by increasing his sales volume.
‚??That‚??s what they‚??re looking for,‚?Ě Scocozzo said. ‚??People look at an order and say, shipping, what‚??s that going to cost? A lot of companies just say OK, free shipping, but you‚??re paying somewhere ‚?Ľ We didn‚??t raise our prices.‚?Ě