Direct-to-Customer Commerce

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Strategic insights into the direct commerce industry, including ecommerce, direct marketing and related fields

Direct Commerce Sales, thru March, 2013

It’s critical to first, define terms.  By Direct Commerce, I’m referring to electronic & mail order retail sales, as reported by the US Dept of Commerce.

There are several similar reports out today, but they define their reporting term differently.  For example, comScore issued a quarterly report on non-travel ecommerce sales, excluding auctions, etc.  They reported about $50 billion of sales in 2013Q1.

The chart below includes all Retail Sales, compared to Direct Commerce sales, as defined above.  The 2013Q1 sales for Direct Commerce is $94.422 billion, year-over-year growth of 17%.  Direct Commerce now represents 7.52% of total retail sales

As you can see from the narrowing of the gap, Direct Commerce sales is growing almost twice as fast as retail sales, overall.  Retail sales in 2013Q1 grew only 1%, while Direct Commerce sales grew 4.2% in the same quarter (quarter-over-quarter).

Screen Shot 2013-05-13 at 1.19.20 PM

Filed under: Direct Commerce, News, , , , ,

How Seamless Are You?

How Seamless Are You? is a study by Accenture on omni-channel retailing, from the customer’s point-of-view.

In my review, I found nothing earth shattering … because it told me what I expected:  customers want to be able to do business with you on their terms, rather than on yours.

Customers expect uniformity in products, pricing and promotions across all available channels.

So, if your organization is complaining about the negative impact of “show rooming” on your sales, then you should immediately consider the fact that your business may not be competitive in these three areas.

There seems to be some reluctance, among some retailers, to recognize that you win and keep customers by being the best company to buy from.  That may mean the best products, or the best prices, or the most attractive promotions.

But you can’t just sit there doing everything like you’ve always done things and expect to preserve your place in the market.  You must be better at something.

You must be more convenient, have a better selection, more available inventory, lower prices … something that differentiates you.

The principles of success have not changed … only the tactics required to implement those principles in the most effective way.

Filed under: News, Omni-Channel Commerce, Opinion, , , , , , , ,

Where Content Marketing ultimately leads …

This story appeared in the Washington Post today, To build brand, companies produce slick content and their own media.

One of the closing thoughts in the article is that “every company is now a media company.”  And that is a correct conclusion.

But the common availability of the tools be a media company, doesn’t mean a company can be casual or sloppy about the content it publishes — in either substance or appearance.

Filed under: Direct Commerce, Ideas, News, , , ,

Cash registers fade away as smartphones, tablets take over

This trend was very foreseeable.  And anyone who doesn’t see it, needs to re-evaluate.  Here’s a link the this story by the AP, published by Gannett … Link

Note even Walmart is experimenting with an iPhone app that enables a shopper to scan items as the shopper drops them into her cart.  Stopping at a self-check-out terminal only to pay and perhaps bag up the items.

And if you’ve never used the “self-pay” function in Apple’s Store app, you should try it.  Scan an item, login with your Apple ID, pay with your registered credit card, email yourself the receipt and walk out of the store.  You can do it with any item that is not stored in the back of the store (which includes the big, very valuable items, as you would expect).

Once again, we talking about convenience to the customer … it’s a never-ending theme, but I’m always amazed at how few people get it.

Personally, I’m waiting for my grocery store to allow me to email my receipt … I hate those long pieces of paper!

Filed under: Ideas, multichannel commerce, News, Opinion, , , , , , , ,

More on “Same Day Delivery”

Late yesterday, Internet Retailer published a story under the headline:  Price beats speed for online shoppers.  In general, the article sites research on the web site features which are most important to what they buy online.

But the article highlights that for 53% of respondents, price is most important, and they use whatever shipping is the lowest cost or free.

Now there is another 47% for whom shipping cost is less significant.

But I hope it’s becoming clearer to all, that same day delivery is a very limited market.  Limited to the affluent & lazy + the urgent.

Most online buyers do not request “overnight delivery.”  Overnight deliveries probably average 3-5%, at most.  I’ve not seen recent data on that question.  So “same-day delivery” is likely a subset of the overnight number.

It may make a theme for a marketing campaign … and it may even be a profitable segment (because people who want same-day delivery are less price sensitive) … but it’s not a big segment.

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

Dept of Commerce stats on Electronic & Mail Order Sales for 2012

The Dept of Commerce has released it’s final report on Retail Sales for 2012.  Below is a graph of the monthly report for Total Retail Sales (the blue line against the left axis) and Electronic & Mail Order Sales (the green bars against the right axis).

Total Retail sales grew 3.7 percent, over 2011, and totaled just short of 4.9 trillions dollars.  Electronic & Mail Order Sales grew 13.2 percent, over 2011, and totaled 324.4 billion dollars.  Electronic & Mail Order Sales represent 7.4 percent of Total Retail Sales.

I don’t want to over analyze what all of this means.  But it is clear that Electronic & Mail Order Sales (what I call Direct Commerce) is growing faster than Retail Sales over all.  And the growth curves changed noticeably, at the beginning of the last recession (late 2008)

Retail Sales by Month

 

Filed under: Direct Commerce, News, , , , ,

Testing Same Day Delivery

The Wall Street Journal reported, today, on eBay and Amazon testing same-day delivery in a couple of major markets.  Here’s a link to the story.

In the San Francisco area, eBay has hired a crew of people, essentially, concierge shoppers, who will locate the product you want at a local store, buy and deliver it to you within one hour of the time you place the order.  Wow, quite a high level of customer service.

Don’t expect this to be a viable service in Yuma, Arizona.

I’m not sure it would be viable even in all of the top ten markets in the US.  But it will be very interesting to watch it.

Based upon the anecdotes of the article, we can imagine this service being used by customers in major markets (where there may be sufficient aggregated demand for such a service) for whom convenience carries a very high value and who is less price sensitive than average.

I think that’s a pretty limited market … but the beauty of the web / ecommerce, is, in part, it’s ability to aggregate demand in ways we’ve never been able to do under earlier retail models.

The economics of same-day delivery are very difficult to make work.

We’ll know same-day delivery has worked when FedEx, UPS and the USPS begin to offer the service.  But don’t hold your breath!

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

The Hidden Costs of Ecommerce Platforms

This is the headline on an article at Website Magazine.  Follow the link to the full text.

The article is based upon research funded by Demandware and executed by Forrester.  Probably the key line is that 43 percent of web merchants experience a TCO higher than they expected.  This is often partially justified by merchants claiming that they’ve over-built to support future growth (and that holds some legitimacy).

But it does not negate the more central fact that the sophistication of ecommerce platforms continues to grow at an escalating rate, which makes is increasingly and sometimes unexpectedly expensive to maintain your place in the marketplace, especially compared to your competition.

This situation makes is ever more important to plan ahead, select carefully, and probably not jump on every bandwagon that rolls by.

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

Keeping Email Marketing in Proper Perspective

Kevin Hillstrom writes today on: Within E-Commerce, Email Marketing is Not Dead.  Using very simple and clear data, he demonstrates the continuing role of email marketing in maintaining customer buying habits.  He also highlights that this same data does not support using email marketing for customer acquisition.

Boy, now that’s a lesson I wish a lot of merchants would learn.

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

The State Of E-Commerce Checkout Design

An article by this title was posted last week at Smashing Magazine, a publication about web design and programming.  Very much worth reading.

However, a careful reading highlights factors that have always been true in the larger direct commerce marketplace.  Some of the characteristics of checkout design vary, based upon the size of the merchant (in sales) and the nature of the market which the merchant services.

Thus, when you read about what “best practices” are; or what factors are “common” or “typical”, you should certainly consider those practices.  But you should also conduct A:B tests to confirm these practices make a difference to your customers.  Because their the only customers that count … or should count.

Filed under: Direct Commerce, News, , , , , ,

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