Retail Sales Continue to Grow Online

In a slowing economy, retail sales are an important indicator of the direction of the nation’s economic trends. Consumer buying patterns at retail provide a glimpse into our confidence and the strength of the consumer economy. While retail sales have been sluggish overall in recent months, online retail sales have fared better. According to figures released by the U.S. Department of Commerce, e-commerce sales rose 13% during the first quarter of this year compared to the same period in 2007. Also, the share of all retail sales occurring online rose from 3.1% to 3.4%.

This trend is not suprising. The web has always offered the advantage of convenience, giving shoppers 24/7 access to the products they want. Now, the soaring cost of gas gives us another reason to shop from our computers. A limitation of e-commerce in its earlier days was consumers’ lack of confidence shopping online. This limitation has waned as more people have made purchases over the Internet.

It is likely that the percentage of all retail sales will continue to rise. Now is the time for the late majority and laggards to swing into action and have a presence online. No, I’m not talking about shoppers. I’m talking about retailers! The role of a retailer’s web site has moved beyond an information source that can drive store traffic. The web should be part of a multichannel effort that not only supports the in-store experience, but it must be a viable outlet for shoppers who increasingly wants to do business online. If you are a retailer that is not offering your customers the option of shopping online- why not?

Link: eMarketer “Retail E-Commerce and the Economy”

More on the Giving Customers a Voice with User Reviews

In a post April 28th, I discussed the increased importance of user-generated product reviews in consumers’ buying decisions. The theme of the message was companies can be well served to give their customers a platform for talking about what they like (and dislike) about products and services.

While empowering customers can be a way to allow them to help one another make product purchase decisions, there may be an even more important reason to consider making a user review section a part of your web site: it can generate revenue. A recent story in DMNews details how specialty retailer PetCo experienced very positive results from a contest that encouraged customers to write product reviews on the PetCo site. People who wrote reviews spent more time on the PetCo web site, shifted their purchases to higher margin products, and increased in dollars spent. Also, return rates for products reviewed on the web site were lower.

The key to PetCo’s success was that it gave customers an incentive to adapt their behavior and begin writing and reading reviews. In this case, the incentive was a chance to win a $500 shopping spree online at PetCo. It would seem safe to say that PetCo’s “expense” for this promotion was actually an investment that potentially will continue to provide ROI in the form of higher sales and more engaged customers.

Link: DMNews “DMNews Speaks with John Lazarchic, VP of E-Commerce at PetCo