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TMCNet:  Cyber Monday sales up more than 28 percent

[November 27, 2012]

Cyber Monday sales up more than 28 percent

Nov 27, 2012 (San Jose Mercury News - McClatchy-Tribune Information Services via COMTEX) -- New taxes collected on online sales could not slow the roll of the Cyber Monday phenom, which saw purchases jump 28 percent over last year.

Some retail analysts had predicted that online tax rules that went into effect this year in California and other states would level the playing field for shopping malls and traditional brick-and-mortar stores that have watched customers disappear to Cyber Monday since it was created seven years ago as yet another day devoted to national consumerism.

They were wrong.

"It doesn't look like they're having a lot of negative impact," said professor Dale Achabal, executive director of Santa Clara University's Retail Management Institute. "What we're seeing is a shift in the way consumers are shopping, with a greater use of online for a significant percentage of their holiday purchases." Cyber Monday sales continued to grow around the country this year because of heavy marketing and deals by online merchants, consumer confidence in the economy and the explosion of iPads, smartphones and apps, said Jay Henderson, strategy director of IBM Smarter Commerce, which tracked a 28.4 percent increase in Cyber Monday sales.

No Cyber Monday sales figures were immediately available. But research firm comScore projected earlier this month that sales would reach $1.5 billion, making it the biggest online shopping day of the year.

Cyber Monday purchases came on the heels of a blockbuster four-day Black Thursday weekend in which 247 million shoppers spend $59.1 billion, according to the National Retail Federation.

"Consumers today are sitting at their desks at work with their credit cards out and clicking away and buying ... or curling up on the couch and doing a little couch commerce," Henderson said.

The San Francisco office of Deloitte & Touche surveyed Cyber Monday customers in Southern California, but not the Bay Area, and found a 3 percent increase in buyers who planned to shop online Monday, or 26 percent of all consumers.

"It's similar to national trends," said Ellen Basilico a partner with Deloitte's San Francisco office. "We do know that consumers are more accustomed to Cyber Monday promotions and retailers are also better at driving more urgency and creating some uncertainty whether those deals will be there later in the season." Until this year, online customers in California were supposed to report their purchases to tax collectors on the honor system. Then on Sept. 15, state officials began requiring online retailers to collect sales taxes directly, based on individual county rates.

"It was a good ride while it lasted," said Alan Ross, 55, of Pinole, who now has to pay Contra Costa's 8.75 percent rate on top of every online purchase. "It was inevitable. I'm surprised it took this long to collect." This year, Ross plans to spend $1,200 to $1,700 shopping online for Christmas presents for his wife, Terri, their two kids and other family members despite higher costs with sales taxes.

"It won't deter me at all one bit," Ross said of the new tax policy. "I'm not a mall guy and I don't like the hassle of the crowds. This works out perfectly for guys like me." Based on Thanksgiving Day and Black Friday online purchases, more online customers (76 percent) were probably making their Cyber Monday purchases on PCs or laptops, but a growing number are using iPads (10 percent), iPhones (8.7 percent) and Androids (5.5 percent), Henderson said.

Joe Servin, a 27-year-old mechanical engineer from Alameda, kept peeking at his iPhone while at work Monday to track online deals on Amazon. But the extra charge of an 8.75 percent sales tax made him more cautious about actually buying.

While Servin did spend $2.99 for "The Dark Knight" Blu-ray disc and $20 for a box set of the "Alien" movie series Monday, he's been much more picky lately about his online purchases.

"I'm now more willing to pick up items locally," he said. "If it's about the same price (once the sales tax is added), I'll just go get it rather than wait two days for the free shipping." Just after California's new rules went into effect, Servin spent $999 on a 47-inch Samsung LED television -- including a PlayStation gaming system -- for himself at a Best Buy store.

"That is something I would have definitely bought on Amazon," he said. "With free, two-day shipping, it was very worth it for me. But because I had to pay the tax, I got the box in my car that day and had it home that night to watch it." But even with the new tax rules, Selvin still plans to do the majority of all of his shopping -- holiday or otherwise -- online.

"Especially this time of the year," he said, "it's not worth it to go out in the crowds. It's insane." Contact Dan Nakaso at 408-271-3648. Follow him at

Top 10 Cyber Monday product search terms: 1. Kindle Fire 2. Uggs 3. iPad 4. iPod Touch 5. iPad Mini 6. Legos 7. Amazon Kindle 8. Wii U 9. Kindle Fire HD 10. Ugg Boots Source: Experian Marketing Services ___ (c)2012 the San Jose Mercury News (San Jose, Calif.) Visit the San Jose Mercury News (San Jose, Calif.) at Distributed by MCT Information Services

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