Cyber Monday, Black Friday sales could trump Boxing Day

As hype surrounding Cyber Monday and Black Friday spreads north of the border, experts say the burgeoning weekend-long holiday sales event could soon surpass Boxing Day as the busiest shopping period of the year.

With the frenzy of what could be Canada's biggest-ever Black Friday over, deal-seekers are turning their focus to Cyber Monday, a day of deep online discounts held the Monday after the busiest shopping day of the year in the U.S.

For years, both events were largely U.S. phenomena that had Canadians who wanted to participate visiting American websites or making cross-border trips on the day after U.S. Thanksgiving, which marks the start of the crucial holiday shopping season when retailers turn profits, or go "into the black."

But a combination of factors — U.S. competitors setting up shop in Canada, Canadian retailers trying to keep sales local, Canadians' shifting shopping habits and tight-fisted consumers with shaky confidence in the economy — are helping to establish the events on Canadian soil.

Willy Kruh, global chairman in retail markets at KPMG, said he wouldn't be surprised if the four days from Black Friday to Cyber Monday soon overtake Boxing Day, now expanded to Boxing Week, as the best period for retailers in Canada.

"On Boxing Day, Christmas is over and they've got to deep discount (merchandise), now you're selling to those who are looking for Christmas presents for deals," he said.

"I'd much rather kick start the season with significant sales this early and I know where my inventory's going to end up, I know where my margins are, I can calculate it more, I can create a greater excitement for the retail season doing it in November than when the season's over."

Cyber Monday growing faster than Black Friday

He says Cyber Monday — which cropped up in Canada just three years ago — is growing at an even faster pace in Canada than Black Friday, as retailers look for new ways to fight back against U.S. competitors eating into their profits.

Last year, Canadian Black Friday sales were up 8.5 per cent from 2010, while Cyber Monday sales grew at 15.4 per cent, according to KPMG research.

Cyber Monday emerged with the advent of online shopping in the 1990s as shoppers wanting to continue their Black Friday spree logged-in at home, as well as at work on the following Monday.

Retailers began to notice a spike in traffic on the day, which is now the busiest online shopping day in the U.S.

Experts and retailers expect this Cyber Monday to be the biggest Canada has ever seen.

"The level of awareness around Cyber Monday last year was fairly limited, savvy web shoppers would know about it, but in terms of mass appeal in the Canadian population…it was nowhere near where we expect it to be this year," said Thierry Hay-Sabourin, director of e-commerce for Future Shop and Best Buy Canada.

Cyber Monday is becoming nearly as popular in Canada as Black Friday, said Kelly Askew, managing director of retail management consulting at Accenture in Canada.

And while e-commerce penetration is lower in Canada than in the U.S., "we're seeing a bit of a tidal change in how Canadians regard internet shopping now," he said, adding that selection, security and shipping at Canadian retailers are improving.

And Canadian chains are seizing opportunities to pull some of their sales forward, he said.

"I suspect we may start to see some declines in the heavy reliance that Canadian retailers have traditionally had on Boxing Day to make their annual numbers."

10% of retail sales online

Kruh pointed out that online shopping makes up just 10 per cent of total retail sales in Canada, but he sees it growing at a much more rapid pace this year and over the next few years.

Canadian consumers are adopting the trend, in part by shopping at sites south of the border that ship across the border, and a growing number of Canadian retailers are realizing they need to offer similar promotions to keep their customers.

This year marks the first time Toys 'R' Us Canada is putting a big emphasis on Cyber Monday, as the company strives to be one of the first in Canada to jump on board in an effort to keep spending local.

"For the past three to four years, Toys 'R' Us, and Canadian retailers in general, have been upping the ante every year…to entice Canadian consumers to stay local and make purchases on .ca and not .com," explained Toys 'R' Us Canada spokeswoman Victoria Spada.

As both Canadians' shopping habits and retailers' online offerings evolve, e-commerce is becoming a real force that could threaten bricks and mortar shops that don't adapt.

A recent American Express poll found that 56 per cent of Canadians plan to shop online for at least some of their gifts this season, up five per cent from 2011. And 23 per cent of those surveyed appeared so averse to crowded malls, long lineups and busy parking lots that they would rather clean their toilets than visit a mall the week before Christmas.

I think it's indicative of the fact that Canadians are becoming more comfortable shopping online," says consumer technology expert Marc Saltzman.

Saltzman believes online shopping will eventually eclipse trips to the mall as a web-savvy generation of young people comes of age.

"I think its a generational thing and increasingly as the younger generation grows up shopping online they're going to be very comfortable doing it, and there's going to be less of a reason to go in and touch and feel the product."