Calling ecommerce, “The bright side of retail,” during her keynote address at the 2009 Shop.org Annual Summit, Sucharita Mulpuru of Forrester Research spelled out six things online retailers have done right. “How is it that web retailers have managed to outperform so many other sectors?” she asked. “The easy answer is that they have lower prices or smaller bases to work with, but I think those are cheap shots, not to mention outright wrong.” Instead she listed the following six online retailer plusses:
Reset their goals.
Times have changed, she said, and companies realized that, “to arrive alive at the end of this downturn was the best way to grow in the long run.”
Redefined their competition.
From McDonald’s venture into coffee to Netflix’s focus on long term growth, retailers are taking a close look at their competition and a new approach to what’s next. “While brick and mortar is fighting the competition in the rear view mirror, the competition is looking years ahead,” she said.
Respected IT.
Web retailers spend seven percent of revenues on IT, while retail as a whole spends about two percent, she said. “The delta really lies in the innovation within ecommerce, enabling people to pay online without credit cards or zoom,” she said. “We cannot understate the value of making these investments.”
Reinforced their partners.
Consumers are brand loyal and love their favorite manufacturers, she said. “Manufacturers realize the web is a bonanza, and the web empowers them.” By Mulpuru’s estimates, about a third of ecommerce spending is generated directly on manufacturer’s websites, or is closely influenced by them, so, “smart manufacturers realize it’s important to do things like offer an extended assortment or provide value added content.”
Reacted to people power.
Over half of retailers who participated in (Shop.org’s study) the State of Retailing Online have engaged in social media, though 66 percent said return is unclear and half of companies said they are just doing it because everyone else is. That said, about a third of online retailers said social marketing initiatives have helped them grow their business. “Companies that have found value in social marketing have found value in the ways that companies find value in market research,” she said. “Social media is an opportunity to engage customers in a way that helps you over a period of time.”
Recognized the mobility revolution.
“If there was one product that was recession proof, it was the iPhone,” she said. “And companies that certainly recognized that were a step ahead of others.” While the number of consumers accessing the Internet through mobile devices is growing, it remains relatively small, she said, but those people are actually buying through their mobile devices. If you’re too focused on email to think about mobile, Mulpuru offered a caveat: more seniors use email than Gen Yers, who are too busy texting, she said. “Email is web retailers’ best friend, but it’s not the future.”