E-commerce stocks continue to outpace the market in 2009

April 6, 2009 Leave a comment

As reported by InternetRetailer.com, e-commerce stocks outpaced the market yet again.  The Internet Retailer Online Retail Index was up 9.5% last week vs. 3.1% for the S&P 500.  For the year the index is up a whopping 22%.

The best-performing stocks last week were American Greetings, Drugstore.com, Blue Nile, Bidz.com, and 1-800-Flowers.com, all with growth between 17 and 25%.

For those who are curious, the 25 companies in the Internet Retailer Online Retail Index are:

1-800-Flowers.com Inc., Akamai Technologies, Amazon.com Inc., American Greetings Corp., Art Technology Group Inc., Bidz.com Inc., Blue Nile Inc., CyberSource Corp., DemandTec Inc., Digital River Inc., Drugstore.com Inc., eBay Inc., GSI Commerce Inc., Keynote Systems Inc., LivePerson Inc., Netflix Inc., NutriSystem Inc., Omniture Inc., Overstock.com Inc., PetMed Express Inc., RealNetworks Inc., Shutterfly Inc., Systemax Inc., United Online Inc. (owner of FTD.com) and VistaPrint Ltd.

For more information, click here.

Filed under eCommerce, Finance, Retailing Tagged with , , , , ,

SEM and SEO spending expected to continue increasing, while online sales continue to bolster retailers

March 25, 2009 Leave a comment

 

According to eMarketer, in spite of growing recessionary concerns U.S. marketers are likely to boost spending by as much as 16 percent in 2009 across the four basic forms of search engine marketing (paid search advertising, contextual advertising, paid inclusion, and search engine optimization.)  Investment is expected to grow to from $12.2 billion last year to $14.1 billion this year.  In addition, they suggest that by 2013 such spending could exceed $23 billion annually.  Another strong upward trend is in the area of search engine optimization, where eMarketer predicts that the size of the SEO industry could almost double in the next five years.

Anecdotal evidence from retailers selling online would appear to support the validity of making these investments.   In its annual report filing, Kohl’s just announced a 48% jump in Internet sales in 2008, joining Macy’s and Saks among retailers who have seen online success despite the recession.  This followed a strong ‘07 for Kohl’s, where online sales grew over 30%.  In the case of Macy’s and Saks, even as poor performing stores were being closed down their online sales were increasing.  What this means is that their brand was still resonating with Internet shoppers.

Online marketing for retailers is more than just SEM and SEO however.  In the case of Kohl’s, they struck timely deals with AOL, MSN and Yahoo during the holidays with eight home page takeovers, plus they offered regular “deal of the day” internet-only discounts on their web site.

The argument for investing in online brand development and selling via SEM, SEO and web site activities remains compelling, especially in these hard economic times.

Filed under eCommerce, Retailing, Sales, Search Engines Tagged with , , , , , , , , ,

Is online advertising failing or is it just the recession?

March 23, 2009 Leave a comment

Eric Clemons has just written a very thoughtful article on “Why Advertising Is Failing On The Internet” on TechCrunch. His high level argument is that the Internet shatters all forms of advertising because it allows consumers to bypass them. He provides evidence for why people don’t trust ads, why they don’t want them, and why they don’t need them. He then goes on to illustrate how the Internet provides ways for people to meaningfully get the information they need without them.

He then moves quickly from advertising to the ecommerce space where he talks about new monetization models around selling real things, selling virtual things, selling virtual experiences, and selling misdirection (a subject where he expresses a lack of faith in Google’s revenue model and sustainability.)

Unfortunately, he falls short in the end of providing a list of concrete replacements for advertising. Can you really imagine a world without ads? Surely they will exist, perhaps in different forms, but they will be omnipresent.  In addition, he sites declining online ad revenues to support his thesis at a time when the culprit may be nothing more than the current recession. Whatever the outcome, his sweeping approach to the landscape of online advertising bears reading.

Filed under advertising, eCommerce, Marketing, Retailing Tagged with , , , , , ,

eBay to focus on secondary markets, revenue growth to lag ecommerce market in ‘09

March 11, 2009 Leave a comment

 

eBay Chief Executive John Donahoe announced at their Analyst Day meeting that the company would focus on selling low-volume and liquidation products as it tranforms its marketplace business.  He said eBay is “not a retailer “, but instead a business intent on focusing on the global secondary marketplace.

ebayHe indicated that changing the business will take time, and that their revenues will grow more slowly than the ecommerce market in ‘09, track it in ‘10 and surpass it in ‘11.

He referred to PayPal as an important part of the business with huge potential.  But it’s eBay’s waning auction growth that is garnering the attention of investors.  Online shoppers are shifting away from auctions to fixed-price purchases on leading product sites like Amazon.com.   Donahoe countered that online auctions and fixed-price sales are simply “formats” that buyers can choose from, and that last year they launched various efforts to promote fixed-price transactions and acquire top sellers.

So far investors appear not to be biting, as eBay share prices are down two-thirds from their 52-week high.  Look for more changes from eBay over the coming months as they look to try and regain their old swagger.

Filed under eCommerce, Retailing, Sales Tagged with , , , , , , ,

What does it take to start an online B2B community?

March 10, 2009 Leave a comment

 

A typical B2B community is one that is created by a company intent on reaching and connecting customers to a) the organization or b) each other.  And it starts by asking a question – what do you want to build the community around?  More succinctly – what are your goals?  For some firms it is a stated desire to get feedback from customers or partners and make a closer, ongoing connection with them.   For others it is to reduce costs by having customers help other customers.  Still others desire to market to their customers in new ways using the latest social media tools.  Whatever your goal, be sure to define the “what” of your community before investigating the “how”.

bridgeAfter defining the goal (customer loyalty, lowering support costs, feedback, keeping customers informed, etc.) the next step is put a small team of people together who are highly motivated to seeing the community come to life.  Like many Web 2.0 communities, the best ones are built around the notion of high focus, high tailoring, niche-type destinations where collaborators can easily engage. 

Early on your launch team will want to do two things.  The first is to identify the key influencers who should be invited to join the community and whose presence will inspire others to join and participate.  The second is to pre-seed the community at launch with topics and conversations that relate to the overall goal.  But note that very quickly the team should be prepared to step away from micro-managing the conversation and let the community organically shape the content and topics on its own – because it will.

What about ROI?  In many B2B communities the ratio for those visitors who read versus those who add content is roughly 25 to 1. This means that every successful interaction potentially influences another 25 visitors on average.  Since influence is often correlated with purchase intent, start with the proxy that 2-5% of sales made to community members were influenced by the community itself.  Then you can refine the proxy value by surveying your members.  And for those B2B communities engaged in self-service customer support the cost avoidance equation is just as straight forward to measure.

However, the best thing about online B2B communities is that they are (in essence) the daily expression of what used to be annual or sporadic conversations of a highly important and valuable nature.  So putting a ROI on this part of the model is much more qualitative.  But there is little doubt that if your business can leverage the opportunity to connect important constituencies together in a real-time fashion, you will gain timely insights, customer credibility, and improved profitability (via increased sales, decreased costs) that otherwise were going untapped. 

Filed under Editorial/Content, Manufacturers, Marketing, Retailing, Sales Tagged with , , , , , , , , , , ,

Survey Shows Frequent Online Shoppers Respond to Personalized Ads

February 5, 2009 Leave a comment

 

ChoiceStream, a provider of personalized product and display ads for large retail and entertainment brands, released their latest online personalization survey.   In it they indicate that retailer’s most attractive prospects–those who spend the most money and shop most frequently–are more likely to click on personalized ads than non-personalized ads.

choicestream1Overall, 39 percent of consumers are more likely to click on an ad if it is personalized – a meaningful percentage in its own right.  But the number climbs to 58% for those who shop online at least several times a month.  And the bigger the spender the greater the interest in personalized ads, with 50% indicating they are more likely to click on them.   Contrast this with only 22% of infrequent shoppers who make that claim.  In addition, 50% of the biggest spenders indicate that they are more likely to click on personalized ads than on non-personalized ones, vs. 32% of the smallest spenders.  

The data also supports a similar pattern in terms of consumer attention to the ads.  Over 41% of those surveyed indicate that they will pay more attention to advertising if it is personalized based on their tastes and interests.   That number increases to 49% of consumers who spent more than $250 online over the past six months, and falls to 36% for those who spent between $1-100.

The survey was completed by 504 online shoppers across a variety of age categories.  The bottom line is that if you are a retailer or manufacturer with loyal customers and those customers shop online and spend over $100 with you, personalized advertising that exposes products they are interested in can yield positive results.

To see a summary of the ChoiceStream survey, click here.

Filed under eCommerce, Manufacturers, Market Research, Marketing, Retailing Tagged with , , , , , , , ,

A Bounce in Consumer Sentiment? Some Encouraging Numbers, Especially for Amazon & WalMart.

January 28, 2009 Leave a comment

 

A survey just released by ChangeWave shows that sentiment on consumer spending may have finally bottomed after a prolonged slowdown.  But they also cautioned that this tiny uptick in their data may be shortlived, much like their May ’08 data following the tax rebate checks.

hand-moneyThat being said, their Jan ’09 survey of almost 2,800 U.S. consumers  said that although fifty-seven percent of U.S. respondents said they’ll spend less during the next 90 days than they did a year ago – that is still three points better than last month’s December survey.  Better still, another 13% said they’ll actually spend more, which is two points better than last month.  Finally, 12% said they think the economy will improve in the next 90 days (up 3 points), and the 56% who said they think the economy will worsen during the next 90 days is still 10 points better than the December low.

What does this mean for online & retail?

For the third consecutive survey, ChangeWave indicates that in the home entertainment and network shopping category Amazon.com (+1 to 24%) is the clear momentum leader.   On the flip side, brick & click retailers like Best Buy (-6  to 37%) and bankruptcy-headed Circuit City (-2 to 7%) show significant weakness going forward.

Finally, for retail stores ChangeWave’s consumer surveys have consistently pointed to two retail winners since Feb ‘07: Wal-Mart and Costco (both +6).   The greatest weakness going forward is among traditional retailers, led by Bed, Bath & Beyond (BBBY) (-14), Sears (SHLD) (-12), Macy’s (M) (-12) and JC Penney (JCP) (-10).

For the majority of Americans who are still spending less, the primary reasons remain reduced household  income, saving money, and debt reduction.

Filed under eCommerce, Economy, Market Research, Retailing Tagged with , , , , , , , , ,

DVD/Blue Ray Sales Fall Behind Videogames For First Time

January 27, 2009 3 Comments

 

According to research firm Media Control GfK International and as reported by Videobusiness.com, global retail sales of packaged home entertainment grew 6% to hit $61 billion in 2008, with fast-growing videogames for the first time outweighing DVD and Blu-ray Disc.  That’s because game software sales grew 20% to $32 billion while combined DVD/Blu-ray sales fell 6% to $29 billion.

Continuing the trend, GFK predicts game sales will grow another 12% globally in 2009 to $36 billion, while DVD and Blu-ray combined will decline another 4% to about $27 billion. 

game controllerIt is worth noting that if you look at Blu-ray sales on a stand-alone basis, they are rising.  They doubled last year and should more than double again this year to $2.9 billion.  But it is the U.S. market that appears to be driving overall global decline in traditional DVD sales, off 8% as compared to just 3% in Europe and 4% in Asia Pacific.  Although still the largest geographic market, the U.S. has seen its share of worldwide sales fall 45% and 43% respectively in the last two years.

The top selling DVD title in the world in 2008?  It was Warner’s The Dark Knight with over 15 million unit sold. 

Filed under Market Research, Retailing, Sales Tagged with , , , , , , ,

Loyalty Cards Getting Smarter Means Couponing May Be Getting Better

January 26, 2009 1 Comment

 

Kroger (the nation’s largest traditional grocery chain) and dunnhumby (the British data mining company) have created a joint venture called dunnhumbyUSA that is significantly increasing coupon redemption rates.  

krogerIt turns out that Kroger is mining their loyalty card data in a way that is signficantly boosting their savings via higher coupon redemptions.  It turns out that Americans typically redeem only 1 percent to 3 percent of paper coupons, even in the current recession.  But Kroger, In contrast, says as many as half the coupons it sends to its regular customers are getting used.

The difference is that Kroger is augmenting standard purchase information from its shopper cards (lots of companies do that) with dunnhumby’s consumer analysis and customer interview methodologies.  This “blend” allows them to send customers the right coupons for the products they regularly buy. 

If you’re a retailer or manufacturer you may want to keep an eye on dunnhumbyUSA.  In addition to the obvious work the do for parent-partner Kroger, they have added Coca-Cola, The Home Depot, Procter & Gamble, Macy’s an Kraft Foods and others to their growing list of clients.  In addition, their web site indicates that they have been adding new offices in cities around the globe.

It will be paticularly interesting to see if or what direction this joint venture might take couponing in the online space.  Jedwar.com will keep watching.

Filed under 1, eCommerce, Manufacturers, Marketing, Retailing Tagged with , , , , , ,

Top 50 Retail Brands for 2009 Includes Two Online-Only Outlets

January 21, 2009 Leave a comment

InterBrandDesignForum has just released their 2009 list of the 50 Most Valuable Retail Brands for 2009.  Heading the list of course is Walmart whose brand is valued at $129 billion.  To get a sense of the range, at #50 is Anthropologies at $420 million. 

Of particular note to Jedwar.com readers, two of the top 15 brands are actually online-only sellers eBay (at #11 and valued at $7.9 billion) and Amazon (at #14 and valued at $6.4 billion.)   As online-only brands both have the advantage of all consumer touchpoints – brand and otherwise – being under one experience.   However, being just on the Internet means their primary competitive differentiator is eBay and Amazon rankingconvenience, which is easier for competitors to narrow.  Brick & mortar stores who also sell online can express their value propositions in a myriad of ways including price, design, store-layout, store-location, attitude, etc.

In addition, eBay’s brand has some challenges ahead.  What was once an auction business is now a blurred collection of acquisitions that include Skype (which hasn’t faired as well as they had hoped) and online payments systems including PayPal.  Further adding to the challenge is their move towards fixed-pricing.  Keeping all those consumer experiences tied together logically will be difficut for eBay, just as it was for previous online aggregators like AOL.

Amazon is in better shape.  Their narrower scope allows them to vigilantly focus on making online buying really, really simple.  With fewer levers to pull they continue to drill down on the critical moving parts of their business which is site useability, product availablity, shipping and price.  It would not be surprising to see Amazon’s brand move ahead of eBay in the 2010 list.

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