Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
Heavy advertising by retail chains benefited the web as much, or more, than stores.
There has been a blizzard of reports in recent days on how shopping is going, both online and in physical stores. Here’s the bottom line: Consumers continue to shift more of their spending to the web, and that trend may have even accelerated a bit over the Thanksgiving holiday weekend.
Among the most authoritative numbers come from comScore Inc., which tracks the actual online behavior of some 1 million U.S. consumers who let comScore track every click they make on the web. According to comScore, online retail sales this holiday weekend increased 20.5% over last year, and Monday’s sales set a single-day record at $1.25 billion. IBM SmarterCommerce, which tracks online sales of 500 larger retailer clients, says their sales were up 30.2% during the same period. That compares to a 4.0% increase in sales at bricks-and-mortar stores for the week ended Nov. 26, which includes the much-ballyhooed Black Friday, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs Weekly Chain Store Sales Index.
The much faster growth online than in stores makes clear that the retail chains made little headway in luring consumers back to their stores with heavy advertising and by opening earlier than ever on Black Friday, or in some cases opening stores Thanksgiving night or even all day Thursday. The doorbuster promotions, holiday decorations and piped-in Christmas music draw many consumers to stores and malls. But many others are content to do much of their shopping online.
Consider other noteworthy statistics: Of the 131 million consumers planning to shop this holiday weekend, 35%, or 46 million of them planned to make purchases online, and those online shoppers expected to make 38% of their purchases on the web, according a survey for the National Retail Federation by market research firm BIGresearch.
What those statistics suggest is that a substantial number of consumers registered all the overheated ads by retail chains in the days leading up to Thanksgiving, and decided that in many cases it’s easier to get those deals online than to fight the crowds at the mall or the local Wal-Mart.
The heavy advertising of Black Friday deals in recent years has trained consumers to expect the best bargains on the Friday after Thanksgiving, notes Eoin Comerford, senior vice president of marketing technology at retail chain and web retailer Moosejaw Mountaineering. “But what's different this year is the growing importance of Black Friday to online retail,” he says. “Consumers are learning that, unless you're one of the lucky few to get the five $2 waffle makers per store, you can get comparable deals from the comfort of your couch, without the crowds, lines, traffic, parking, sleeping out, elbows to the ribs, etc., etc.”
And he doesn’t even mention the pepper spray one shopper allegedly used to ensure she got the best deals at a Wal-Mart in Los Angeles on Friday. Sitting at home, coffee mug in hand, iPad in lap, and shopping at a time that’s convenient is getting more appealing to many consumers. Store retailers are going to have to come up with something better than a 3 a.m. opening and a deep discount on a flat-screen TV to turn around that trend.