Tuesday, July 24, 2012

E-tail to Retail


In the earlier days of this publication there was a section called E-commerce Corner, a separate portion of the news dedicated to reporting – apart from “real” retail news - the latest trends in the growing world of internet sales.

In the first issue I ever worked on, July of 2001, we reported that “according to data published by Forrester Research, consumers spent $3.9 billion online in May”.  Online retail sales for that entire year would run to about $34 billion, according to Forrester, which back then sounded like real money. However, online retail sales for 2012 will likely come in closer to $210-220 billion: “online shopping has shown no signs of slowing down. Last year, it generated $200 billion in revenue…According to InternetRetailer.com, US e-retail sales alone will grow to $240 billion by 2013, and worldwide e-retail will approach $1 trillion by 2013”.1

Other tidbits from the July 2001 E-Commerce Corner: “53 internet companies closed in June, bringing the total number of dot-com sector companies to shutter over the past year and a half to 555 or more”. Remember those heady times? Also: “Amazon.com has halted free shipping on multiple orders of books, compact discs, videos, and digital video discs after a two-week promotion that…was a test run”. It’s almost quaint, isn’t it?

I don’t recall exactly when, but in one of several KeyPoints redesigns over the next decade-plus, I eliminated the separate e-commerce section. It’s all just retail industry news now, whether it’s about building a flagship store or building a Facebook following. It goes without saying that online retailing has evolved from a developing but still somewhat separate phenomenon, warily observed and tentatively sampled by what are still sometimes referred to as “bricks-and-mortar” retailers, to simply one of several ways in which virtually all of those retailers do business, with varying degrees of dedication, innovation, and success. In a world of Twitter feeds, tablet wars, showrooming, and QR codes, we herein present a few tidbits from the recent news that I’ll call E-Commerce Corner 2012:

What The Customer Wants:
“Shoppers worldwide expect a seamless integration across online, social media, mobile and physical stores, according to "Digital Shopper Relevancy," a report by Capgemini which surveyed 16,000 digital shoppers More than half of those surveyed (56%) are likely to spend more money at a physical store if they had used digital channels to research the product prior to purchase; however, 73% of respondents also expect online prices to be lower than those in physical stores…The study did highlight that 55% of women shoppers are more engaged when using digital channels, compared with 44% of men…”2

Retailers Lead the Way:
“When comparing social media investment to other emerging technology areas, retailers more than any other industry are making strong investments…successful retailers are integrating their mobile, analytic, and social media strategies into one cohesive business approach. Social media touch points such as Facebook, Twitter, and Groupon are enabling companies to analyze customer behavior and in turn deliver personalized offers direct to a consumer's mobile device.”3

Phone Yes, Mobile Shopping No:
“Mobile phones — once viewed as the best growth vehicle for online shopping — have proved a dud with many consumers because of their small screens and keypads.” 4

Tablets Take Over:
“Consumers are likely to spend more time shopping from a tablet than from other types of devices…According to the 2012 Shop.org/Forrester Research Inc. State of Retailing Online survey, 49 percent of merchants reported their average order value from tablets now exceeds Web sales from laptop and desktop computers and smartphones”.5

At Long Last Sales Tax:
“A wave of states have passed laws that will require consumers to pay sales tax on all Internet purchases as soon as next year…For states struggling in the troubled economy, this could mean $23 billion in new revenue each year. Had online retailers collected sales tax this year, Virginia would have added nearly $423 million to its coffers, while Maryland would have seen $376 million…The movement in state capitals is driving newfound support for a proposed bill in Congress that could make collection of sales tax a standard practice on the Web, no matter where a consumer logs in to shop… Amazon.com appears to have waved the white flag and supports the sales tax measures… Rather than threatening to shut down distribution centers or cut ties with online affiliates, the retail giant started cutting deals with state governments, analysts said. Amazon will begin charging sales taxes for customers in eight states, including Virginia, over the next four years. It currently collects sales taxes in six others.”6

Same Day Some Day?:
Speaking of Amazon, as one must when speaking of online retail sales, an item from a few days ago: “Amazon’s move to start collecting sales tax allows it to build distribution centers in major markets. Already the retailer is offering next day delivery, working to make it standard for Amazon prime user members. Same day delivery is reportedly not far behind”.7

Not far at all; an even more recent story, right here in our home state: “Amazon’s ability to undercut prices is a tough break. But imagine how much worse it could be for retailers if the...site turns the market upside down by delivering products at all hours of the day, on the date of purchase… as part of a plan to open warehouses near populous areas and provide same-day delivery. The Retailers Association of Massachusetts estimates that doing so would add $25 million to $45 million per year to Bay State coffers from Amazon alone…same-day delivery service by Amazon will put the squeeze on big box stores such as Target and Best Buy — not mom-and-pop stores that carry unique items…the immediacy gives them a huge advantage over competitors.”8

Chris Cardoni, Marketing Manager
CCardoni@KeyPointPartners.com

SOURCES: 1.Internetretailer.com; 2. Global report underscores need for seamless shopping across all channels, DrugStoreNews.com; 3. IDC Study Reveals Emerging Social Media Trends Across Vertical Markets - Retailers lead all verticals with social media investments, IDC; 4. Shoppers using tablets spend more online, Boston.com; 5. Shoppers using tablets spend more online, Boston.com; 6. States, Congress rallying for an e-sales tax, WashingtonPost.com; 7. Home Improvement Retailers Better Watch Out, Amazon Is Coming, Forbes.com; 8. Amazon eyes same-day delivery, BostonHerald.com

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