The annual Internet Retailer conference has wrapped up for 2009, and my company, SBTV.com, was there in Boston to assess both the tone and turnout. The Internet retail economy has been considered a bright spot in this recession. As consumers have sought to find discounts they have gone on-line to use price comparison sites, and find quality overstock or used goods. But are e-tailers thriving or just surviving? And are the hopeful they will be positioned to grow their companies to the next level?
The short of it is this, some are holding their own, while others are seeing lots of green. In general it is an area of growth as other retail outlets contract. Everyone seems confident that when the economy turns around e-tailing will be bigger than ever and here to stay. The companies that grow their inventory, and improve their systems for dealing with customer inquiries and complaints, and learn to properly use social media for marketing will be ready to face the future. In fact, an increase in online retailers has led to an increase in the number of companies offering services that will help with growth through marketing, sales, and customer service. We saw one company offering outsource call center services, while another touted lower cost shipping services to Canada and other foreign markets. In general U.S. companies have not aggressively sought to reach even the Canadian market because of the high cost of shipping.
In terms of turnout, we can’t deny that turnout was down. However, one company that provides a hi-tech product for invoicing told us while they were seeing fewer people inquiring about their product, those who did stop by knew exactly what they were looking for. They were shopping around for the best option, and trying to figure out the best time to make the investment. In years past a lot of people showed up at the event thinking they too could jump on the e-tail bandwagon without even having a business plan first. In this economy only the lean and mean companies intent on growing their businesses, or the serious and savvy entrepreneur, seem willing to spend the money and time to attend. In the end many of the companies on the showroom floor were happy to talk with fewer people who were clearly more likely to bring them future business. A good analogy might be real estate. An agent would rather not show the house 100 times to curious lookers, when their time is better spent giving extended tours to 10 buyers who are pre-qualified, have the money down, and really want to live in that neighborhood.
This year there was also a greater spirit of sole entrepreneurship. More individuals with a passion for certain products are finding a place on-line, and are able to compete with the bigger companies because of services that help them develop relationships with suppliers and manufacturers. Alibaba.com took up space at the center of the showroom floor, and was a first stop for many sole entrepreneurs looking to start or grow their businesses. Taj Izhar works out of his home office in Princeton, NJ and runs two sites: www.safarijeweleryshop.com, and www.organicteacafe.com He’s doing business in a competitive landscape and feeling his price points just can’t match or compete with the larger sites on-line that offer the same products. At the same time he wants to find those products that consumers can’t find anywhere else. He, like so many other e-tailers here, sought out Alibaba.com as he looks for ways to find suppliers with competitive pricing. As Alibaba.com grows so does their reputation for helping business owners like Taj Izhar. Todd McCartney sells promotional goods to some of the major airlines. He was able to compete with larger companies and bring his costs down by 300 percent after finding a foreign supplier through Alibaba.com.
There is an interesting observation from e-tailers this year that also makes for a good closing thought. This industry was born out of the boom economy of the last 7 years, and has now become the most immune to going bust. In fact, Internet retailing might help us get back on our feet a little sooner.