Found a report on online retail that seems pretty optimistic, despite the general gloom about retail and consumer spending in the real world American economy.
http://www.informationweek.com/news/internet/retail/showArticle.jhtml?articleID=207100283
A few things that struck me as interesting:
"It forecasts $26.6 billion in clothing sales, $23.9 billion in computer sales, and $19.3 billion in automobile sales."
Who knew clothing sales would surpass computer sales online! I guess there are ways to surpass the 'touch and feel and fit' aspect of brick and mortar shopping that was the main deterrent for shopping clothes online. New technology that helps find the right size helps, so do return policies in case something goes wrong. In any case, this is very encouraging for online retail as it indicates the long-term potential of selling any real world product online.
"More affluent customers appreciate the convenience of shopping online and are not necessarily looking for the best deal," Mulpuru said in a prepared statement. "Retailers would be wise to recognize there are significant opportunities within both audiences and should market to them accordingly."
This is an important insight. People want convenience and people want deals, but these may not be the same people. The folks who want deals could spend several hours researching stuff online, they may even go to a brick and mortar store to see the product (common in case of big ticket electronics purchases like LCD TVs) and then finally purchase from the cheapest online vendor. Marketing to these customers should focus on price. Marketing to the customer who cares about convenience should be based on quick delivery (eg: overnight Fedex offered by BlueNile.com), high product quality and high quality site design.
"Retailers are less interested in promoting free shipping options this year compared to previous years. Eighty-five percent of online retailers said they promoted shipping with conditions before, but only 35% plan to focus more on such promotions this year."
I guess the recession does have an impact on online retailers as well. It will be interesting to see how used to we have become to free shipping offers online.
"The report stresses that social networking sites help build brands but they are less proven for driving revenue than e-mail marketing and free shipping promotions. "
As with any new technology, some creative company out there has to figure out a way to help companies make money with this. As we saw in class, people trust their communities (and even strangers) more than companies, magazines or newspapers. There is a huge selling opportunity for the right product that satisfies the needs of a community. The challenge is to break into that community without breaking the trust that the members share.
No comments:
Post a Comment