Online Holiday Sales Up, Cashback Down
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News Analysis. So much for that year-old recession. Online retail shopping was way, way up over the Thanksgiving weekend through so-called Cyber Monday. Too bad Microsoft customers couldn't cash in on a Live Search promotion. |
According to ComScore, online retail sales were up 13 percent year over year from Black Friday (Nov. 28) through Cyber Monday (Dec. 1). But the big gains were tempered by a broader decline. Consumers have spent $12.03 billion online for the holiday to date, for a 2 percent year-over-year decline.
The question: Will stronger-than-expected online sales take away from retail store sales? The latter could disproportionately affect Microsoft partners selling through retail outlets, such as Best Buy, Circuit City or Fry's Electronics. But that sales data isn't yet available.
"Mark Twain might have said: 'Rumors of the death of online holiday shopping have been greatly exaggerated,'" Gian Fulgoni, ComScore's chairman, said in a statement. "Consumers are clearly responding positively to retailers' aggressive online discounts. With Cyber Monday promotions beginning in earnest over the Thanksgiving weekend."
According to ComScore surveys, 51 percent of consumers cited heavier promotions than holiday 2007. The promotions worked. Cyber Monday 2008 was the second-busiest online shopping day on record.

"This is an extremely encouraging development for retailers and we can but hope that their aggressive discounting has still left room for profits," Gian said in the statement. Room for profits? Gian, maybe you were too quick with that Mark Twain quote. If many retailers have exhausted their margins, as I strongly suspect they have, those rumors of death weren't premature at all.
Give It Away Now
Some promotions border on the ridiculous. Here's some of the stuff I saw on Monday (some deals are still good today):
- Dell Outlet: 15 percent off refurbished XPS M1530 laptops, 15 percent off refurb 1320c Color Laser printers and 20 percent off refurb Inspiron 530 towers. Already, there's little to no margin in refurbished computers, so these are steep discounts.
- Costco: HP EX470 MediaSmart Server with 500GB with eSATA hard drive for $379.99 delivered. Can you say Windows Home Server? The same model is $499.99 today from Amazon and $659.68 from PC Connection.
- TigerDirect: Acer 15.4-inch laptop with 2.13GHz processor, 1GB of RAM, 120GB hard drive, DVD burner and Windows Vista Home Premium plus D-Link wireless router for $399.99. TigerDirect also offered free anti-virus software with every laptop.
- B&H Photo: Asus Eee PC 900 with 900MHz Intel processor, 1GB of RAM, 12GB solid-state hard drive, 8.9-inch display and Windows XP Home for $249.95; the item is sold out. That's an OK deal. Amazon has a newer model with a 1.6GHz Atom processor and 160GB hard drive for $329.99 in stock today.
Cyber Monday may have passed, but the promotions still continue. Last week, ComScore said that in past years Cyber Monday sales typically foreshadowed the entire season. Yeah, but the past was a different economy, I say. The aggressive discounting for this year's promotions suggest much has changed, and I wouldn't read to much into Dec. 1 sales. Yet.
NPD hasn't yet released data on retail stores, which may have suffered from online promotions. Store traffic was down every place I went over the weekend. Roger Kay, Endpoint Technologies president, quipped about Black Friday: "There was plenty of parking at our mall."
Cashback Cashes Out
The strangest e-commerce story of the season yet belongs to Microsoft. Over at TechFlash, Todd Bishop has offered the blow-by-blow view of an increasingly bloodied Microsoft. Quickly: Microsoft has got this Live Search "Cashback" program where the company will eventually pay back a portion of the purchase price to consumers using Live Search to make their purchases. Problem: The service went dark for most of Nov. 28. You know it's bad when a Microsoft employee blogs "Black Friday cashback blackout."
The amount of money involved or number of affected buyers could be sizable. "All orders placed on HP Shopping through Live Search cashback on November 28, 2008, are eligible for a 40 percent cashback rebate," according to a Microsoft FAQ. Many consumers placing the orders didn't get the special rebate (instead, 3 percent), while others couldn't place the orders.
Todd asked in a Dec. 2 blog post: "Can the Live Search Cashback mess get any messier?" Maybe. In the FAQ, Microsoft seems to back off a promise to bring back that big 40 percent discount. For all the publicity, people are sure to cash in on the cashback. There are deals, and then there are steals.
I've got to wonder what might have been if Microsoft had brought back that big 40 percent off HP shopping promotion on Cyber Monday. Maybe Microsoft would have bought major search share and made Dec. 1 the biggest online shopping day ever. :)
[Please send your tips or rumors to watchtips at live.com].


Comments (13)
Al saw that Live Cash Back program, via email from eBay.
What a convoluted mess. Search thru live, click on the link, yadda yadda, log back into a live account, wait 11 weeks for cash back.
it was more trouble than it was worth (speaking for only Al). It was like a MIR, except you had to do three times the work for a pay off 3 months down the road.
If MSFT wants to make Live more attractive (or at least pay off people to use it), make the cash back program EASIER, or better yet, save people the money up front. who wants to mess around on the back end trying to get money?
Posted by Al | December 3, 2008 3:25 PM
On what people are wasting their money for? there is so many people without work, without homes, and geeks are buying nonsense, better to give the money to charity ......
Posted by moshind | December 3, 2008 3:25 PM
On a related note,
http://blog.mlive.com/manzero/2008/12/can_we_please_just_declare_nin.html
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Appears like Microsoft have lost another battle. The Nintendo WII is un-officially the winner in the console sale wars.
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MS, have you broken even on your 360 yet?
Posted by Goblin | December 3, 2008 4:28 PM
The Live Search cashback fiasco is another in a long line of Microsoft internet service fiascoes.
Nobody wants to buy the decent cars Detroit now makes because of it's checkered past. Why would any company trust Azure when Microsoft has repeatedly demonstrated it's willingness to put shaky services in the wild?
Posted by Phil | December 3, 2008 6:33 PM
@moshind
I'm all in favour of charity, but buying stuff is vital to get the economy back on track.
If everyone takes your advice and stops buying things they don't absolutely need, then the companies selling and making those things (any company, not just tech companies) won't make much money. Those companies will either close down or have to put people out of jobs, leading to more unemployment. Which leads to more people not being able to afford things they don't absolutely need. Which leads to more companies getting in trouble and so the cycle continues, with less and less companies making enough money and more and more people losing jobs.
On the other hand, if people go out and spend their spare cash, the companies stay open and keep their staff, maybe even hire new people.
This is a hugely simplified view of an incredibly complex problem but I will stick with my view: the more people spend (at least, those who can afford to) the quicker we'll be out of this mess.
Posted by Jess Meats | December 4, 2008 3:54 AM
@Moshind
Whilst its a nice sentiment, I will though have to agree with Jess.
That being said, if you want to get the latest software AND be able to donate your money to charity, go Open Source, the software is free and you will be free to give all your money away if you want.
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Geek or not Moshind, we welcome all into our open source community.
Posted by Goblin | December 4, 2008 4:01 AM
@Jess Meats, I have to side with Moshind on the wasting money. I probably wouldn't give it charity so it gets wasted again, but I believe we should cut down on spending. Particularly spending money we don't have.
It seems people haven't realized credit isn't wealth. Stunned? Let me run it again, credit isn't wealth. We're in this economic situation not because of lack of spending, but because financial institutions exceeded themselves in loans. People and companies took them thinking they could pay back, but couldn't.
When this cracks, companies have a hard time getting credit to finance their operations (remember the multibillion dollar bailout?). Imagine for a second a farmer who takes a loan to plant and farm. If he can't get the loan he can't even produce. A startup could be another example. It runs out of cash before it can have a product to sell to you the consumer. In all these cases people loose their jobs without you even getting a chance to pay for something. If they spent a lot of money on trivial things and now they don't have a good amount of savings, well things get really bad real quick.
I'm also amazed at how America is so capitalist to reap wealth, but so socialist to dilute costs. Why should I go out and help the big corporations? Give them money for trivial goods I don't really need? So that they may redistribute my wealth to their shareholders and to a lesser extent to their employees? So redistribution of wealth through taxes is socialism, but redistribution of wealth through uncontrolled spending of the family income is not?
Of course it isn't a "zero spending policy", but in this situation I'd either not spend at all or spend with my terms and prices. After all it is a free market isn't it? If there is more offer than demand then it is me who can set the price or not buy at all. It is a great opportunity to cut great deals if you have cash. If you've spent your cash on trivial stuff over the years because you were worried companies wouldn't have to pay their employees and now you're deep in debt. Well tough luck for being such a socialist.
Posted by Gerardo Tasistro | December 4, 2008 11:08 AM
TigerDirect: Acer 15.4-inch laptop with 2.13GHz processor, 1GB of RAM, 120GB hard drive, DVD burner and Windows Vista Home Premium plus D-Link wireless router for $399.99. TigerDirect also offered free anti-virus software with every laptop.
Not a very good deal, really. It's two 512MB chips; even if you replace them with 1G chips (bought separately, no upgrade offered by Tiger), you've used up the memory ports on the machine.
And the Wireless Router is two-generations ago as well; can be bought at Staples for about $20 these days.
I've tried running a Vista Basic Laptop with only 2G of RAM--never again, and cannot imagine that Home Premium O/S would be less of a memory hog.
Posted by Ken Houghton | December 4, 2008 6:21 PM
@Gerardo
I wasn't suggesting spending money you don't have. I was suggesting that "those who can afford to" ought to keep up their spending.
However we got into this mess is less of an issue than getting out of it. If you're not working for a bank, there's not much you can do about banks loaning out too much money or offering credit to those who can't pay. But stimulating business is one part of fixing the problem (based on the opinion of someone with no qualifications at all in economics) and it's something the average, working individual can do.
If those who have money to spare (whether companies or individuals) keep spending that money, it will help businesses keep operating. If everyone stops buying things (I'm being deliberately vague here because the principle applies to most things), manufacturers and retailers will be in even more trouble.
On the other hand, if you don't have any money to spare, don't spend. I'm not trying to encourage those who are in debt to make things worse for themselves.
Posted by Jess Meats | December 5, 2008 4:55 AM
http://blogs.msdn.com/livesearch/archive/2008/12/05/update-on-the-black-friday-cashback-outage.aspx
From the blog linked above.
"There have been lots of questions on whether the 40% off HP promotion on Black Friday will be restarted. While we were hoping to be able to do that, we are sorry to report that it will not be restarted."
This is crap! I couldn't get through to HP through the live.com portal so I didn't order (tried for 5 hours). It turns out I should have just order from the HP site and then emailed the idiots at MS the next day and they would have given me the 40% off anyway.
UNBELIEVABLE!!!!!! Way to get people to use your service. MS never ceases to amaze me with the crap it puts out to the market....hopefully someday the market will grow a pair and reject their garbage.
Posted by Kevin | December 8, 2008 11:26 AM
@Jess, sorry for the late reply I had to move to a new apartment this weekend. Regarding your post, I never meant to say you wanted us to spend more than we earn. Just that given:
moneycentral.msn.com/content/ SavingandDebt/P70581.asp
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* About 43% of American families spend more than they earn each year.
* Average households carry some $8,000 in credit card debt.
* Personal bankruptcies have doubled in the past decade.
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I'm inclined to believe this is what is happening. Now if 43% of American families are spending more than they earn, how many (percent) are spending all that they earn (equilibrium)? And how many are spending less than they earn and are thus able to "salvage the economy"? 30 percent? 20 percent maybe?
Regarding "If you're not working for a bank, there's not much you can do about banks loaning out too much money or offering credit to those who can't pay." I'd say heck yea! Call your congressman or representative and tell them to push regulations on these institutions. If banks can't keep themselves from over lending in a unregulated market then it is the governments responsibility to regulate them. Some may say this is bad, that government regulation is bad. I agree, in theory the folks in charge should be wise enough to know better. It seems though they're greedy enough to omit their better judgment in benefit of profit. Now if the government (read tax payers) now has to bail them out, why shouldn't we have a say in this issue, in the future regulation and quite possibly in the prosecution of some cases?
Regarding the spending by companies to boost the economy. Why do you think unemployment is rising and expected to rise even further? Should companies do the same thing individuals are doing and hire more people? So they pay these people more money so they in turn spend it and more people have more money to spend it in the company goods. This is basically your same theory applied to companies instead of consumers, but it doesn't happen in real life right? Why?
Posted by Gerardo Tasistro | December 8, 2008 5:55 PM
I personally believe that no best laptop can be universally recognized by all users as long as there are so many manufacturers that produce computers...
Posted by Everything About The Best Laptops | January 28, 2009 8:49 PM
f everyone takes your advice and stops buying things they don't absolutely need, then the companies selling and making those things won't make much money.
Posted by refurbished computers | December 24, 2009 9:23 AM