E-Commerce Week #2

Business Week Online

“Flat Holiday Sales for E-tailers?”

Aaron Ricadela

http://www.businessweek.com/technology/content/nov2008/tc20081125_473588.htm?chan=technology_technology+index+page_internet

Key Points

With the growth that online retailing has made, it’s hard to believe that this year could possible be the first time that this form of retailing may not quite outperform last year’s sales. A team of social scientists have recently been studying many sites and tracking the viewing numbers of online shoppers, and are making assessments based on the amount of time it takes shoppers to discover a site, and how long it takes for their attention to be lost. These scientists tested the results of the effectiveness of add-ons(suggesting to a consumer to purchase another product that goes along with the one they are purchasing at the time of checkout) in websites and found there to be a result of 30% increase from not using add-ons at all. By being able to determine these patterns and moves of customers, and with marketers knowing that this year looks to be rough when it comes to online sales, they are realizing they need to develop new ways to get customers attention. Because of the stock market meltdown that has occurred this year, e-commerce sales have been affected dramatically and are seeing major decreases in sales statistics. With all the job losses, inflation, and falling housing prices, consumers just aren’t wanting to spend money, and therefore, online retailers have been caught off guard with this unexpected downfall.

 To try to draw in shoppers, online retailers are being forced to cut their prices even more, and are lowering minimum purchasing requirements in order to reel customers in with free shipping. Some stores are doing anything they can to increase their sales, and Gap for example, took all of its branch stores and combined their checkouts into one, and also used email marketing tactics to push for customers attention, and were able to be successful in raising their online sales to an extent. Retailers are noticing that products that are not sold in great volume is what customers are wanting, and is the complete opposite for what they traditionally want from online retailers at this time of year. It pretty much comes down to online retailers are going to have to pull out all the stops in order to get consumers attention and make it through what looks to be a not so good shopping season.

 What I found interesting about this article was that e-commerce sales are taking more of a hit from the effects of the stock market than I realized. While this may be beneficial for all of us as customers, many companies are going to be faced with a struggle that they weren’t expecting this year, especially during the holiday season. It should be interesting the numbers that are released following this shopping season, and whether they end up being as flat as they are predicted to be.