Posts Tagged ‘ecommerce’
April 1st, 2013 :: Rieva Lesonsky
By Rieva Lesonsky
Spurred by the rapid adoption of mobile devices like tablets and smartphones, as well as by major retailers’ investment in their websites, ecommerce sales in the U.S. are projected to rise from $231 billion last year to $262 billion this year—an increase of 13 percent–according to the latest forecasts from market research firm Forrester. Three product categories account for one-third of that total: apparel and accessories, consumer electronics and computer hardware.
Ecommerce currently accounts for some 8 percent of overall U.S. retail sales (or 11 percent, if grocery sales are excluded). Growth in online retail sales is projected to outpace the growth of traditional retail sales in the next five years. By 2017, total ecommerce sales in the U.S. should hit $370 billion.
Forrester says the increased use of smartphones and tablets is a major factor powering ecommerce growth. With over 50 percent of U.S. online users owning smartphones, many smartphone owners use any spare moment to go online. As a result, people are spending more time overall online than they would if they had to go to their PC or laptop to shop—and that means more browsing, shopping and purchasing.
Another driver behind ecommerce growth is that major retailers are rapidly making investments in their ecommerce divisions in order to better integrate their in-store and online shopping experiences. Even customers who head to a brick-and-mortar store now often end up buying merchandise online within the store, or using smartphones to find the same products elsewhere and order them online.
Surprisingly, new shoppers coming online for the first time are not a major factor in the growth of ecommerce. Just 4 million people are projected to buy online for the first time this year. Instead, growth is coming because people who are already comfortable with online shopping are now spending more money online, ordering more often, and buying a wider range of products from a variety of sites. Forrester says online shoppers typically become comfortable with ecommerce by purchasing low-risk items such as downloadable music or movies. Only then do they move up to more expensive purchases such as appliances or home furnishings.
Forrester’s report has some more good news, not just for ecommerce vendors but also for the economy as a whole: Ecommerce companies are powering employment growth. Currently, Forrester says, U.S. ecommerce businesses employ over 400,000 people, and that figure is expected to hit 500,000 by 2017.
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March 29th, 2013 :: Rieva Lesonsky
By Rieva Lesonsky
Are you stressing because you know big retailers are increasingly offering same-day delivery, and your small ecommerce site can’t afford to do so? If you’re worried that same-day delivery is a game-changer that will make or break your business, you can breathe a sigh of relief. A new study by the Boston Consulting Group found that customers don’t actually care that much about same-day delivery, despite the emphasis that big ecommerce sites and retailers like Amazon.com and Wal-Mart may put on this service.
The BCG study found that consumers care much more about low prices and free shipping than they do about same-day delivery. Only 9 percent of consumers polled say same-day delivery would improve their online shopping experience. In contrast, 74 percent say free shipping would and 50 percent say lower prices would.
The study notes that lots of dotcom companies touted same-day delivery in the first dotcom boom in the 1990s-2000s, and that the service didn’t prove popular enough to keep those companies afloat.
There is one niche market that could be willing to spend on same-day delivery. Affluent, urban Millennials with incomes of $150,000 or more have shown greater than average interest in this service. If that’s your target market, you may want to consider this option.
However, even so, keep in mind this advice that BCG offers for making same-day delivery work without breaking the bank:
- Charge additional fees for same-day delivery. The average respondent in the survey was willing to pay $6 for this service; affluent Millennials were willing to pay up to $10.
- Limit same-day delivery offerings. It’s best to offer same-day shipping only for smaller, lightweight products, like electronics, office supplies or apparel, that can be quickly packed and don’t cost a lot to ship.
- Focus on high-margin items. Products where you’re making a higher profit make more sense for same-day delivery.
- Consider your location. If your customers are primarily in upscale, urban areas where delivery is common, such as New York City or Boston, it may make sense to test same-day delivery. If you’re in a rural or suburban area, however, it’s likely not going to be cost-effective.
Keep an eye on what happens with same-day delivery so you don’t get caught behind the eight-ball if the concept takes off—but also keep in mind that currently, BCG found that only 2 percent of online purchases are delivered the same day, meaning demand for this service is far from widespread.
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February 26th, 2013 :: Maria Valdez Haubrich
By Maria Valdez Haubrich
You know that ecommerce spending is growing—but did you know by just how much? In 2012, online shopping in the U.S. grew by 15 percent compared to 2011, reports comScore’s recently released full-year 2012 data. This was the strongest annual growth rate since back before the recession began. Overall, U.S. online shoppers spent $186.2 billion in 2012.
In the fourth quarter of 2012 alone (which includes the holiday shopping season), ecommerce sales grew by 14 percent year over year, reaching approximately $56.78 billion. ComScore had originally forecast a higher growth rate for 2012 ecommerce holiday sales, but last-minute consumer worries about the “fiscal cliff” appear to have had some effect on dampening online holiday sales just a bit.
Of course, the fourth-quarter sales are still nothing to complain about. Fourth-quarter 2012 was the first quarter ever that online sales hit $50 billion. It was also the thirteenth consecutive quarter of positive year-over-year growth and the ninth consecutive quarter of double-digit growth.
What kinds of products contributed the most to the growth in ecommerce sales? The strongest areas (those where online sales increased by at least 15 percent year over year) were digital content and subscriptions, consumer electronics, toys and hobby-related items, apparel and accessories, and books and magazines. So while digital content still leads the way (not surprisingly), most major retail areas are well-represented.
Overall, the number of U.S. ecommerce buyers rose by 6 percent, showing that more consumers are more comfortable buying online. In addition, the average spending per buyer rose by 8 percent.
All told, U.S. online spending accounted for 10 percent of total U.S. retail spending last year (excluding spending on food, gas and automotive). That makes 2012 the first time that U.S. ecommerce spending has hit double digits.
While comScore hasn’t yet made a projection as to 2013 ecommerce spending, the report says that as long as the lower-than-expected fourth-quarter 2012 sales were just a temporary setback, rather than a foreshadowing of decreasing economic confidence among consumers, 2013 is highly likely to see strong growth as well.
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February 14th, 2013 :: Maria Valdez Haubrich
By Maria Valdez Haubrich
eConsultancy recently highlighted the top 7 reasons people buy from online ecommerce sites instead of brick-and-mortar stores. Based on research from MIT, Facebook, Google and Target, the key drivers of online shopping are:
- Value – 75 percent say online prices are more competitive. Can a small business always offer the lowest price? Clearly not, so how can you compete? eConsultancy says despite the emphasis on low price, 81 percent of those surveyed report they have paid more to get better service. If you can’t beat big-box retailers’ online prices, make sure you provide something else that’s special to make up for it.
- Open – 63 percent prefer being able to shop at any time of day or night. Be sure your site is up and running as smoothly in the middle of the night as it is during the day, and that you can handle increased traffic at any time. Also be sure that your customer service options—such as live chat or the ability to call and talk to a customer service rep—are 24/7.
- Delivery – 59 percent are persuaded by free delivery. That doesn’t mean you have to offer free shipping on everything, of course. You can keep it affordable for your business (while still meaningful to consumers) by setting limits such as “free shipping on all orders over $50.”
- Speed – 55 percent like being able to get products the next day. Again, that might be tough to offer, but in a separate eConsultancy survey about holiday 2012 shopping habits, 26 percent of consumers said they had paid extra for next-day delivery.
- Ease – 48 percent say online shopping is just easier. Make sure it’s easy by having a website that’s simple to navigate, allows for ease of sorting and searching, provides all the information a customer might want about products (including reviews from other customers) and has a wide range of product shots and even videos.
- Range – 46 percent like being able to see what’s in stock and available at a glance. Make sure your site is well stocked and your inventory management/fulfillment system is top notch. Also enable customers to sort for specifics such as size and color quickly.
- Choice – 40 percent cite the ability to buy new or otherwise unavailable merchandise. This is where small online retailers can really shine. Design your site, write your copy and develop your marketing materials so they emphasize the unique, custom or hard-to-find aspects of what you sell. Make it clear this isn’t your average big-box retail site—this is something special.
Keep these 7 key factors in mind, and you’ll do better at converting visitors to your site into buyers—and return customers.
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February 12th, 2013 :: Karen Axelton
By Karen Axelton
It may be hard to believe, but with the 2012 holiday shopping season just behind us, smart retailers are already prepping for the 2013 holiday retail rush. Shop.org and BIGInsights recently conducted a survey of retailers in which they asked them what they plan to do differently this coming holiday season. Here are the most common responses:
- Better inventory management. Retailers plan to do better in terms of planning their inventory, managing it and being better-stocked with the most popular products on hand.
- Improved online infrastructure. Online shopping was huge for holiday 2012, and that trend will only continue in 2013. No wonder that retailers are focusing on improved server capabilities, faster-loading pages and an overall better online experience for users. Shop.org notes that testing your site on multiple platforms and mobile devices is an important part of having a strong online infrastructure.
- Better marketing. Areas where retailers plan to spend in 2013 include keyword purchasing, email marketing, organic and paid search marketing efforts. Better strategic planning–of marketing channels, marketing messages and marketing spending–was a key theme among respondents seeking to avoid last-minute scrambling and changes.
- Cross-channel shopping and improved customer experience. Customers increasingly view shopping as a holistic experience where they move seamlessly from online engagement with your brand to buying online or in-store. Smart retailers are working to improve that experience at all touchpoints, and are harnessing data and analytics to understand how shoppers buy and interact with their companies both online and off. A full one-fourth of companies in the survey were planning a website redesign this year.
- Mobile commerce. Retailers are still feeling their way in the world of m-commerce, but companies are investing in areas including responsive Web design, optimizing their sites for tablet use and enabling mobile checkout. Shop.org cites another survey which found that 43 percent of retailers named tablets and mobile as among their top three initiatives for this year.
- Better customer service/fulfillment. More than 3 in 5 retailers say they will be investing in a wider range of shipping options for the coming year. Among the alternatives companies are considering: ship-to-store for in-store pickup, same-day delivery and free returns. Companies also say they want to provide better last-minute shopping options, better guarantees of Christmas delivery, and faster delivery in general.
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January 16th, 2013 :: Rieva Lesonsky
By Rieva Lesonsky
The holiday shopping season resulted in as much as $43.4 billion in sales for online retailers. But a study performed by The Adcom Group for Virtual Hold Technology (VHT) suggests that number could have been much higher if consumers hadn’t struggled with a variety of obstacles to completing the online sale.
The study found that more than three-fourths of online shoppers ran into shopping roadblocks when they had a problem completing the purchase, but couldn’t find help online. A similar number reported that this frustration led them to give up entirely and abandon their online shopping cart.
What specific issues were causing problems?
- Problems correctly reading and using the captcha – 80.3 percent
- Trouble using promo codes, gift card redemption, or with other discount – 46 percent
- Product was back-ordered – 32.5 percent
- Had questions about product features and had difficulty finding answers - 31 percent
- The site timed out (or appeared to) – 30.5 percent
- Had problems logging onto the site, setting up your account or remembering your password – 29.3 percent
- Had questions about shipping and had difficulty finding answers – 24.7 percent
- Had problems entering credit card data or with credit card acceptance -22.6 percent
- Had questions about product availability and had difficulty finding answers – 20.1 percent
- Had problems re-setting your password – 18.9 percent
- Had questions about the return policy and had difficulty finding answers – 15.9 percent
Here’s the really scary part: When faced with these problems, more than 37 percent of customers just give up, and 25.5 percent head to a competitor.
How could online retailers help combat the problem of abandoned shopping carts? Rapidly resolving the problems that get in the way of buying was the number-one answer. Customers overwhelmingly said they would buy more from a site that offered the ability to click or tap to get immediate customer service assistance. In fact, more than three-fourths said they would prefer a site that offered this convenience to a competing site that didn’t.
Providing better customer service would not only drive customers to complete purchases, but also inspire new business. Over half of survey respondents said they would become promoters of brands that offered the ability to click or tap for customer service, and that they would refer others to the brand, website or mobile app.
Of course, many of the issues mentioned above could be solved with a robust set of FAQs that’s easy to find on your site. Make sure FAQs about issues such as shipping, return policies and more are clearly visible on every page of your site navigation.
You can download the full results of the study at www.virtualhold.com/onlineshopping.
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January 8th, 2013 :: Maria Valdez Haubrich
Clipix
Black Friday online sales numbers prove ecommerce is alive and thriving, but why would consumers pick your website over a competitor’s? Clipix can help consumers remember your site and keep them coming back to shop again. For consumers, Clipix is a private bookmarking tool that lets consumers set Price Drop Alerts, an innovative feature that monitors real-time discounts on the items sold on your website. By adding the Clipix icon to your site, you’re encouraging shoppers to bookmark your page to their personal shopping lists. And if a Price Drop Alert is received, the customer is linked directly to your checkout page at no cost to you (the online retailer).
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January 8th, 2013 :: Karen Axelton
By Karen Axelton
While social media may get all the buzz in the marketing world, when it comes to boosting ecommerce sales, statistics show that email is still more effective. Data from trade organization the Direct Marketing Association show that email outperforms social media advertising by three to one when measured in sales per advertising dollar spent. This year alone, during the key Black Friday-Cyber Monday weekend, the number of online shoppers who bought something after visiting an ecommerce site from a social networking site declined by 26 percent compared to 2011, IBM Digital Analytics Benchmark reported. On both Black Friday and Cyber Monday, “social sales” accounted for less than 0.5 percent of all online sales.
How can you make your email marketing messages more effective?
- Target your messages. A generic email blast about a sale won’t be as effective as specific emails targeted to different consumer groups based on their behavior. You can target emails based on what consumers have done in the past (such as past purchases) or what they’ve browsed on your site recently.
- Whet shoppers’ appetites. Limited-time offers still work well to drive shoppers from your email message to your website. “Today Only,” “Just 3 Hours Left” or other subject lines that convince customers they’d better act now are a good way to get shoppers to click through.
- Use landing pages. Be sure when shoppers click through your emails they don’t just go to your home page. Create a landing page designed for that specific email that includes strong calls to action to persuade customers to act. For instance, an email touting a sale on children’s clothing should go directly to your children’s clothing sale page.
- Don’t let shopping carts sit abandoned. Many customers put items in their shopping carts, then don’t check out. Set triggered emails to remind customers of their waiting items or update them when a price has changed on something in their cart.
- Use cookies and online advertising. Use cookies to track customer activity on your site. Then when customers browse your site, you can serve up ads later on unrelated sites for the products they viewed on yours. This is a great tactic to keep your website and your products top-of-mind until customers are ready to buy.
- Be aggressive about retaining your email list. Instead of a simple “unsubscribe” option, consider offering a range of choices on your unsubscribe page. For instance, some e-tailers ask customers if they’d like to see the emails less often, such as once a month instead of once a week. You can even set up your unsubscribe to ask customers if they want to take a break (such as three months off) from emails before receiving them again.
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January 7th, 2013 :: Maria Valdez Haubrich
Google Translate
Les tailles sont sur le petit côté. If you plan to sell products or services overseas, don’t assume all your customers speak English or you could be turning away a lot of interested customers. (The phrase means “Sizes run on the small side,” by the way.) Google Translate is a free translation service that provides instant translations between 64 different languages. By looking at patterns in hundreds of millions of documents, it decides on the best translation and can translate words, sentences and Web pages. By simply adding a Google Translate embed code to your website, you make it easy for customers to choose the language they would like your website translated to.
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January 7th, 2013 :: Rieva Lesonsky
By Rieva Lesonsky
It used to be that if you had a brick-and-mortar retail store, you eventually added ecommerce capabilities. But now that so many retail businesses are starting out as online-only, a new trend is taking place. The New York Times recently reported that a growing number of online-only retailers are opening brick-and-mortar stores to capture more business and enhance their brands. Should you consider this move?
Obviously, this approach isn’t right for every company. Here are some questions to ask if you’re considering whether a brick-and-mortar store is right for you:
- Is your product tactile or unique? Clothing and apparel stores are naturals for this type of brand extension, as shoppers want to touch, feel and try on the merchandise.
- Can you find a small space? Most ecommerce sites that open brick-and-mortar stores aren’t going big, but are considering the retail space as a brand extension or showroom. Others are creating pop-up stores that open temporarily for special occasions such as the holiday shopping season.
- Can you make it special? A real-world store needs to offer an “experience” to resonate with shoppers, so think about what you can offer in your physical store that you can’t do online.
- Do you have an avid customer base? If most of your shoppers come from one part of the country, such as New York City, it might make sense to open a shop there.
- Are my sales strong enough to support a retail store? A track record of online sales success will give you an edge in getting a lease and financing for opening a store.
While most of the companies mentioned in the Times article are big chains with deep pockets (such as Gap’s Piperlime division and eBay), there are others that started with entrepreneurial roots, such as eyeglasses retailer Warby Parker and apparel company Bonobos. The Times notes that companies that starting out as an online-only retailer gives you a different perspective on brick-and-mortar sales. For instance, at the Bonobos stores, customers make appointments to come in so the shop can operate with very limited staff. Stores operate as “showrooms” with clothes in all styles, but limited sizes and colors. Customers try items on for size, then clerks order the product online for them and have it delivered the next day.
Increasingly, consumers are expecting online and offline retail to blend together in a seamless experience, and that’s what this new breed of brick-and-mortar stores is doing.
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