US retailers aim to cash in on Cyber Monday with steep online discounts

By Aishwarya Venugopal and Arriana McLymore

(Reuters) -After lackluster spending at U.S. stores on a deals-heavy Black Friday, retailers are pulling out all the stops with steep promotions and discounts on their websites and apps to entice people to buy holiday gifts and other merchandise after the long Thanksgiving weekend.

Retailers have been coaxing cautious U.S. shoppers on Cyber Monday — traditionally America’s biggest internet shopping day — with push notifications, emails and other ads touting heavily discounted cosmetics, electronics, toys, clothing and other products.

With just 23 days before Christmas, the discounts this year have been deeper, with shoppers waiting for promotion-heavy days, experts have said. For instance, Target (NYSE:) said it was offering 50% off thousands of items including video games, home decor and other technology items with a “two-day Cyber Monday” sale that started on Sunday.

The moves follow a mixed holiday season so far, with muted spending in stores on key shopping days such as Black Friday. Sales at brick-and-mortar stores on Friday grew just 0.7% year over year, according to preliminary estimates by payments processor Mastercard (NYSE:). Meanwhile, data firm Facteus said sales were actually lower.

Online, retailers like Walmart (NYSE:) and Amazon (NASDAQ:) have relied on generative AI customer service and search features to make it easier for shoppers to find products on websites and mobile apps.

Pittsburgh, Pennsylvania, resident Cheyenne Berens, 29, has been using Amazon’s generative AI chatbot Rufus to track prices of baby merchandise and electronics this holiday season. Amazon launched Rufus in February to give customers product recommendations and details based on its entire catalog of merchandise.

“I have found that using Rufus on Amazon has been extremely helpful in determining whether a ‘deal’ is actually a ‘deal’,” Berens said. She’s been tracking the fluctuating prices of a Pack ‘n’ Play portable playpen and waiting for the right time to buy. The price started at $90 before the holidays, briefly rose to $120 and dropped back to $90, she said.

Caila Schwartz, director of consumer insights at Salesforce (NYSE:), a cloud-computing company that tracks global shopping data from more than 1.5 billion consumers, said that GenAI tools such as chatbots to answer online shoppers’ basic questions, such as queries about products, helped retailers protect their profit margins despite rising costs. 

On Saturday, retailers using GenAI tools for customer service saw a 15% higher purchase rate by users, according to estimates by Salesforce. Schwartz said the higher so-called conversion rate “is a game changer.”

Spending online on Monday in the United States is expected to reach $13.2 billion, 6% more than on Cyber Monday a year earlier, according to preliminary estimates from Adobe (NASDAQ:) Inc. That outlay would follow the roughly $10.8 billion Americans spent online on Black Friday, according to Adobe. 

Traffic to retail sites from chatbots or shoppers clicking on a link to a website rose 1,800% from Black Friday through the weekend, Adobe said.

With many Americans recently carrying more debt, many are using third-party “buy now, pay later” services, with spending on the services likely to approach $1 billion, according to projections by Adobe, which keeps track of devices that use its software to help power more than 1 trillion visits to U.S. retail sites.