According to comScore, a leader in measuring Internet usage and online shopping, 2009 should go down as the best year ever for online merchants. For the period from November 1st through December 20th 2009, online merchants rang up sales of $25.5 billion. 2009 surpassed the same period last year by $1 billion, a 4% increase.
Clearly online sales are biting into traditional brick and mortar retailer’s business. Even mammoth Wal-Mart whose online store got off to a rocky start a few years ago did a booming business this year. Week after week during the this year’s online season, sharp shoppers could see Wal-Mart and Amazon.com fighting it out online for the merchant that had the best deals. Each merchant worked hard to undercut the other’s prices on the other’s weekly specials. It was a refreshing event to watch Wal-Mart actually playing defense to Amazon, clearly the online king.
According to comScore, December 15, 2009 was the best online shopping day in the history of the Internet, with over $900 million in sales reported for the day. The three strongest days of the year for online merchants were December 15, 16, and 17th with each day surpassing $800 million in sales.
Small and mid sized merchants need to learn a few lessons from these statistics.
1. If you are a retailer that doesn’t have a website you are losing many sales. Websites have replaced yellow pages in their power to provide consumers with information about company products and services. If you are a merchant without a website the first thing you should do after the dust clears from this season is to get one put up. It doesn’t have to be or start out as a webstore, but it does have to give viewers the basics about your business, maps, some appropriate photos, and maybe even a short homemade video of you talking about what separates you from your competitors.
2. Internet retailing is here to say. Having a really first class webstore costs many times less than the rent in a suburban mall. If you sell specialty goods or merchandise, consider being an online merchant instead of a brick and mortar store.
3. If you are a brick and mortar store and want to begin selling online, remember you may have the webstore compete against the physical store. One idea is to draw from the physical store inventory to fulfill webstore orders. Keep most of the profits of web sales in the brick and mortar stores to help offset the extremely high rent that mall landlords like Simon Properties and Growth Properties charge. Keep the sales figures separate as you don’t owe the mall overage sales on merchandise not actually sold in the mall.
4. If you have a webstore, use it to drive local customers into your brick and mortar stores where well trained sales clerks can do a better job with suggestive selling than the online store.
5. If you are a brick and mortar merchant that has a webstore, ask store patrons to sign up on your web mailing list so you can send them announcements of cool specials and new products. Use both the physical store and web store to compliment rather than compete with each other.
6. At the end of a season, put the mark-downs on the webstore in addition to a sale rack. Clearing out that space in the brick and mortar store for the new season’s merchandise is important.
No one has a crystal ball that can accurately predict what 2010 retail sales will look like. Still it is safe to say that online retailing is here to stay and if you are a brick and mortar retailer that doesn’t have a website, you better get busy or risk becoming extinct.No one has a crystal ball that can accurately predict what 2010 retail sales will look like. Still it is safe to say that online retailing is here to stay and if you are a brick and mortar retailer that doesn’t have a website, you better get busy or risk becoming extinct.