DMA wins suit against Colorado RE sales/use tax on interstate purchases

Here’s a link to the U.S. District Court ruling, it’s pretty definitive.  Colorado cannot require out-of-state retailers to collect, or even facilitate the collection of Colorado sales or use taxes, without prior action from the Supreme Court or the Congress.

Essentially, the court’s ruling says this was a slam dunk for the DMA.  It granted a permanent injunction against Colorado doing anything to enforce it’s law on this subject.

Maybe California and other states will get the message.

Filed under: News, Colorado, DMA, interstate commerce, sales tax, use tax

Customers Prefer Easy to Exceptional

Customers Prefer Easy to Exceptional – this link takes you to the full article in Multichannel Merchant.

It’s an excellent premise.  And the premise of the article — that customers prefer easy resolution to exceptional customer service — is consistent with the fundamental idea that direct commerce is about convenience.

So, Merchants, make it convenient (read that as “easy”) to buy things from you and easy to resolve any problem that might arise.

Filed under: News, Opinion, convenience, Customer Care, Direct Commerce, multichannel merchant

Acquisition Spending, Direct Mail on the Rise: Winterberry Report

Acquisition Spending, Direct Mail on the Rise: Winterberry Report.

Interesting market analysis and forecast for 2011 by Bruce Biegel, managing director of Winterberry Group, interviewed in Chief Marketer.

In general, direct and digital marketing are not the dominant advertising channels, as compared to traditional media.  Paper-based direct mail is making a little comeback, expected to rise 5.8% in 2011.

Worth reading the whole piece.

Filed under: Direct Commerce, News, Opinion, acquisition, advertising, Direct Commerce, Direct Mail, DRTV, multi-channel

Monthly Retail Sales Numbers

The Economics & Statistics Administration released its, Advance Monthly Sales for Retail and Food Services

Retail sales in October 2010 were $373.1 billion, an increase of 1.2 percent from September and an increase of 7.3 percent from October 2009.  Excluding autos, retail sales were $306.1 billion, up 0.4 percent from last month and up 6.0 percent from last year.

Retail sales peaked back in Nov 2007 at $379.4 billion.  So, you can see we’re getting close to a complete recovery from a pure sales point of view.  Retail sales have been growing at a rate of $1-3 billion per month for most of 2010.

However, Electronic and Mail order sales dipped in Dec 2007, after peaking at $17.6 billion.  Sales wobbled up and down in a very narrow window for a number of months, but surged passed the Dec 2007 peak in Aug 2009 and has not looked back.

In Sep 2010 (the most recent monthly report available), Electronic and Mail Order Sales reach $23.3 billion a full 30% higher than Sep 2009.

Direct Commerce is where the action is, but Brick & Mortar retail is still the name of the game.

Direct Commerce constitutes only 6.321% of total retail sales.

Filed under: Direct Commerce, News, Opinion, Direct Commerce, retail sales, sales, us dept of commerce

New Dimensional Weight Factor to Boost Shipping Costs

Here’s a link to an important article in Multichannel Merchant  – New Dimensional Weight Factor to Boost Shipping Costs.

This is a huge change.  The article documents a coming change by FedEx and UPS to reduce the factor used to calculate Dimensional Weights from 194 to 166.  The article explains the calculation, if you’re unfamiliar with it.

This change is important and noteworthy in both the short-term and the long term.  In the short-term, because it will mean an immediate rate increase on many packages.  And it will also increase the percentage of packages to which DIM weights will apply.

In the longer term, it portends a move towards DIM weights becoming the default or de facto method for rating the cost of shipping parcels.  After all, it’s generally accepted that planes and trailers are most likely to fill up space-wise before they fill up weight-wise.  So carriers will make the most money, if they charge based upon DIM Weights.

An example for comparison.  Let’s assume a 3# packaged being shipped to Zone 5 — the generic average parcel bound for a residential address.  Further, let’s assume a parcel 12″ x 12″ x 8″ — not huge, not small.  This parcel calculates to a DIM weight of 5.938 using the 194 factor; 6.94 using the 166 factor.

Here are UPS Ground rates (without accessorial charges, based upon the current rate table):

• 3# Z5          = $6.24
• 5.938# Z5 = $7.10 (an increase of 14% over actual weight)
• 6.94# Z5    = $7.29 (an increase of 17% over actual weight)

This change by FedEx & UPS should result in a lot of work on product packaging, in an effort to reduce parcel sizes.  And it will put increased pressure on “free shipping offers.”

Filed under: Direct Commerce, News, DIM weights, Direct Commerce, FedEx, multichannel merchant, shipping, UPS, USPS

Rising Package Shipments A Sign of Hope

Rising Package Shipments A Sign of Hope.

This is an article in Multichannel Merchant about the increase in parcel volumes at the three major parcel carriers (FedEx, UPS, USPS).  This increase, of course, parallels the uptick in direct commerce sales reported here earlier.

Filed under: News, Direct Commerce, retail sales, shipping

Direct Commerce sales double since Aug 2003

Direct Commerce retail sales, reported by the US Dept of Commerce as “Electronic & Mail-Order Sales,” have doubled since Aug 2003.

The chart shows total retail sales on the blue line against the left axis.  Direct Commerce sales are the green bars against the right axis.

During this same period, Aug 2003 to Aug 2010, Total Retail Sales have risen only 18.2%.

Perhaps even more significantly, Direct Commerce Sales as a percent of Total Retail Sales has risen to 6.16%, its highest ratio, ever.

Good news, but we also need to be careful not to read too much into this.  Direct Commerce has always succeeded in large part due to its convenience, and in a major recession, those with larger incomes are more concerned with convenience and more able to continue spending.

So, this could be most the effect of the current economic conditions.

Filed under: News, Opinion, Direct Commerce, economy, retail sales, us dept of commerce

New UPS Rates for 2010

Here’s a link to a summary of the rate changes for 2010 from UPS.  Click here.

Nothing new here, except for the details.  Most of the changes are in the arena of accessorial charges, where it seems that UPS seeks to make most of their profit margin today.  The basic rates seem designed to cover costs.

But I confess, that’s pretty much a shipper’s skepticism.

Filed under: Direct Commerce, News, Opinion, shipping, UPS

Target announces impending divorce from Amazon

Here’s a link to the story in DM News.

This is just another example of the maturing nature of the ecommerce space.  No longer does Target need Amazon to attract “eyeballs” of customers.  Frankly, it’s long past due, and I suspect it’s happening now, only because their contract is probably expiring.

On top of everything else,  when you do business with Amazon, you have to evaluate the relative value of access to their customers to the relative cost of Amazon having all your customers.  Which has more value to your business.

My personal view is there is a case to be made that Amazon’s reason to exist is narrowing.  Amazon is best at selling commodities to large numbers of consumers.  If you’re not selling commodities, or your strategy is to differentiate your business from your competitors, then Amazon is not the place for you to be.  And there aren’t a lot of businesses who fit that description.

Filed under: Direct Commerce, News, Opinion, Direct Commerce, Web

Shipping Options for Residential Deliveries

UPS and FedEx are providing new options for residential deliveries.  Here’s the complete story in Multichannel Merchant.

The real news here is that UPS is offering it’s “Basic” service to a broader range of shippers, with much lower volumes.  Up until recently, UPS only offered this service to very large volume shippers, and as they usually do, offered only to clients who also had large volumes of commercial shipments as well.

This simply reinforces the conclusion that there is continuing pressure to find lower cost shipping solutions, especially in the face of increasing rates.  And, the USPS remains the lowest cost solution for “the last mile.”

For some time, it’s been the conventional wisdom that the USPS’ most profitable segment was parcel delivery, but the USPS does not seem to have been able to fully leverage that fact in their own marketing.  Thus, the recent USPS campaign around Priority Mail flat rate shipping.  Which is probably the most sensible advertising campaign the USPS has ever executed — good for them.

Good low cost shipping options remain an important component of direct commerce strategies — driven largely by the near universal attractiveness of free shipping offers.

Filed under: News, Opinion, advertising, Direct Commerce, FedEx, shipping, strategy, UPS, USPS