The downturn in US economy has become the headline of almost all major newspapers & news channels. This economic slump has had a direct effect on the purchasing power of US consumers who are aggressive & dynamic in their shopping behavior. As we progress towards 2008 shopping season, most US shoppers are now looking for more & more options of doing full-fledge shopping at very low prices. US retail sales are basically projected in 2 categories...
(1) Retail Sales (2) Online retail sales (aka Retail Ecommerce Sales). Let us see some of the statistical figures related to US retail sales & major player’s quarterly sales.
Ecommerce sales comparison 2000-2008
Source: Emarketer
In US, Ecommerce sales account for only 4% of total retail sales. Though the percentage change for 2008 is not so impressive, industry experts believe that there will be a huge shift in consumers from offline shopping to online shopping. The most likely reason being the lucrative discounts & promotions offered by online retailers when compared to the physical stores. Moreover, a large number of shoppers hail from lower/medium income groups who would be interested in good bargains & product availability at lower prices from online retailers. Such offers will help the latter in driving online sales & website traffic, while physical retailers fail to deliver.
Despite an economic slowdown, US top online retailers have continuously recorded a substantial growth in their sales. Online retail giant Amazon recorded a 37% ($4.13bn) increase in their online sales in the 1st quarter of 2008 when compared to the same quarter ($3.1bn) of the previous year. Top US retailers Home Depot & JC Penny have posted a drastic drop in their offline sales. Only a few exceptions like Wal-mart posted a decent increase in their sales by offering heavy discounts & adopting promotions strategy. Such retailers are now eyeing the online retail market primarily based on certain assumptions, like greater penetration of the internet, existing buyers will spend more online , consumers belong to different income levels and specially the higher income level group will spend more. On other hand retail stores can cut operational expenses involved in running physical stores & pass on such savings to consumers by offering low prices through a web store.
This situation has bought some good news for online retailers as they will be attracting offline customers apart from their existing audience. According to the TNS retail forward, consumer electronics market in 2008 holiday shopping season will record 4% growth in its sales.
Here are some general guidelines for online retailers in order to drive sales this holiday shopping season:
- List more and more high margin products.
- Keep sharp eye on the online market trends i.e. pricing movement of the competitive products.
- Put your entire effort on tagging low or competitively priced products.
- Offer attractive discounts & promotions i.e. cash back, free shipping, coupons etc.
- Market your products in various other online marketing channels i.e. shopping comparison engines, organic search results.
- Make sure you have in-stock inventory.
4 comments:
hi, where did u take the table from
You may refer to US Department of Commerce site, who displays statistical data on US E-commerce sales.
Link: http://www.census.gov/mrts/www/data/html/08Q1.html
We've seen results today that the UK economy has slowed for the first time in 16 years.
Not looking so great.
The GBP has fallen really low now, even things such as buying services online from a US company would cost like 25% or something ridiculous more. If I am honest hope this all blows over soon for everyones benefit.
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