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Cyber Monday online sales soared 20.6% this year compared to 2012, thanks to a massive year-over-year growth in mobile traffic and sales. According to the recent Cyber Monday 2013 report from International Business Machines (IBM - Analyst Report) analytics division, mobile traffic surged 45.0% from the year-ago period to 31.7% of all online traffic.

Smartphones lead the traffic growth (19.7%) compared with tablets (11.5%). Traffic from iOS devices were 22.4% of all online traffic compared with 9.1% of Android users. Sales through iOS devices were 14.5% of all online sales compared to 2.6% for Android.

As per Adobe, Cyber Monday sales jumped 16.0% year over year to approximately $2.3 billion. Adobe cited aggressive buying from tablet owners as the main reason behind this strong growth.

According to IBM, tablets accounted for 11.7% of all online sales, much higher than 5.5% of sales done through smartphones. Tablet users spent $126.30 per order compared to $106.49 spent by smartphone users.

As per ComScore, U.S. online sales rose 17.3% on Thanksgiving and Black Friday. The strong Cyber Monday sales figure reflects U.S. consumers' growing appetite for online deals and promotions from ecommerce providers such as Groupon (GRPN - Analyst Report), eBay (EBAY - Analyst Report) and Amazon.com (AMZN - Analyst Report).

The attractive deals and promotions led to a continued shift to online shopping instead of a physical visit to a Brick-and-Mortar store. This consumer shift drove online sales during the five day period from Thanksgiving Day through Cyber Monday, which jumped 16.5% from 2012.

Mobile sales were more than 17.0% of total online sales, an increase of 55.4% year-over-year. E-Commerce service providers such as Amazon.com (a 46.0% sales jump on Cyber Monday), eBay (a 30.0% sales jump on Cyber Monday), as well as traditional retailers Wal-Mart (WMT - Analyst Report), Best Buy (BBY - Analyst Report) and Target (TGT - Analyst Report) that also offer online sales, also benefited from the shift to online.

IBM’s report also noted that Cyber Monday online sales were up 31.5% over Black Friday in 2013, despite a significant decline in mobile traffic and sales during the period. This was primarily due to the online deals and promotional offers, as Cyber Monday shoppers spent 5.0% less per order compared to Black Friday.

Our Take

The 2013 holiday season has started with a bang primarily driven by a solid Cyber Monday. However, whether this rally continues up to the end of the year is something to watch out for, in our view.

As per Nielsen, the holiday season this year is expected to be marginally stronger than in 2012. Sales are expected to increase just 2.0%, driven by the strongest consumer sentiment in almost six years.

However, retail sentiments continue to remain dismal due to lackluster overall retail sales during the Thanksgiving weekend. According to the National Retail Federation (NRF), consumers on average spent 3.9% less during the same weekend in 2012.

In this bleak scenario, ecommerce continues to flourish, particularly driven by continuing adoption of smartphones and tablets. eMarketer expects m-commerce to increase as a percentage of total ecommerce, with strong holiday sales this year taking its share of total ecommerce sales to 16%, or $41.7 billion (previous forecast was 15%, or $38.8 billion).

We believe that e-commerce firms such as Amazon, eBay and Groupon will continue to benefit from this trend during this year’s holiday season. Currently, all of them carry a Zacks Rank #3 (Hold).

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