Direct-to-Customer Commerce

Icon

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

After all is said and done, it’s still about what you sell

I’m a fan of Kevin Hillstrom’s blog:  MineThatData.  He posted yesterday about the impact of social media on sales, profits and stock prices, and specifically compared HP, Dell and Apple.  The post was entitled, Dell, HP and Apple:  It’s the Merchandise.

In summary,

  • HP has lackluster products, declining sales, declining stock price and no social media presence.
  • Dell has a spectacular social media presence, uninspiring products, pretty flat sales, and less dramatic, but still declining stock price.
  • Apple has products that continue in high demand, growing sales, skyrocketing stock price (even though it’s down over the very short term), and absolutely no social media presence.

Hillstrom concludes that superior products that customers demand still does more to drive business success than most marketing, and certainly more than social media.

Another relevant consideration to keep in mind, as you budget and strategize about your marketing efforts.

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

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, , , ,

Kevin Hillstrom: MineThatData – A/B Testing: Here’s An Example

Kevin Hillstrom: MineThatData – A/B Testing: Here’s An Example.

In the article linked above, Kevin makes a great point — some sales happen without marketing.

Do you know what that percentage is for your business?  Kevin outlines a testing strategy to find out.

It’s worth looking into.

Filed under: Direct Commerce, Ideas, , , ,

Why have direct commerce sales held up better than overall retail sales?

First, I suppose I should document the inference in my question that direct commerce sales have held up better.  Based upon Retail Sales data from economy.com, the following facts are in evidence:

  • Current retail sales (actually, Aug 2009) are just a little below what they were in Oct 2008.  But they are also about the same as they were in Dec 2005 / Jan 2006.  Overall, a drop of 7.5 percent from their peak in Nov 2007.
  • In contrast, current direct commerce sales (Jul 2009), which also peaked in Nov 2007, are down only 2.25% from their peak.

Why?

I suggest there are two reasons:

First, the decline in retail sales driven by the general downturn in the economy has resulted is even less staff at retail stores, resulting in even poorer customer service, resulting in more customers being driven away from stores.

Second, direct commerce has always been driven more by convenience than by price.  And affluent consumers are more interested in convenience than price.  So, affluent consumers, who are less affected by the economic downturn, have sustained sales at direct commerce businesses to a greater extent than retail stores.

The Implications

My concern about this is the longer term effects, when retail managers recognize that their retail store sales will recover regardless of the poor quality of their customer relationships.  If they can get by with fewer staff now, can they get by with fewer staff later?  Maybe, maybe not.  But I bet they’re going to try.

This is just one reason why joblessness recovers more slowly than the economy.

This also explains the continuing pressure on businesses of all types to move to the internet for their core business functions — it allows them to accomplish as much if not more with the same or fewer employees.

Filed under: Uncategorized, , , , ,

Where will the action be in 2009?

There’s an article in the December issue of Direct provides some of the answer to this question.  It’s based upon data from the DMA .

Here’s a chart of the data, showing Projected Sales by Direct Channel for 2009 (in $ billions).


What surprised me a little, when I first saw this data, was the relationship of Direct mail / catalog to Direct mail / non-catalog.  I was surprised the catalog numbers were so much lower.  But, at the same time, then I noticed the Web marketing / non-email numbers.  You might be tempted to think this web marketing sales number is based upon Search or Advertising, but it is also likely driven a lot by catalogs.

I don’t know about you, but when I order from a catalog, I often place the order on the catalog web site, just to avoid all the up-selling, which to many consumers is annoying.

It also seems likely that the Telemarketing sales number is driven a lot by catalog.  These three channels seem to be closely linked and almost impossible to differentiate.

This is great information for Service Providers who are assessing where to devote their marketing efforts to secure new clients.

Filed under: Direct Commerce, , , , ,

Pages

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 27 other followers

2016 ElectionsNovember 8th, 2016
Get ready!
August 2017
M T W T F S S
« Feb    
 123456
78910111213
14151617181920
21222324252627
28293031