Mark Mahaney of Citi Investment Research sent out a note last week with key takeaways from the Internet Retailer Conference that took place on June 8-11 in Chicago. The theme of the 2010 conference was “Time to Reboot—Get Ready for E-Retailing's Return to Double-Digit Growth.” In case you didn’t attend, below are the major trends from the largest ecommerce event in the country:
- Large online and multi-channel retailers are getting larger — Internet Retailer released the 2010 Top 500 Guide, including profiles and statistics of the largest retail websites in the U.S. ranked by annual sales. While ecommerce sales grew last year by 2% Y/Y, sales of the Top 500 Internet retailers increased 9% Y/Y, and sales of web-only retailers increased 20% Y/Y—during a year when retailer sales decreased Y/Y. Thus, the Internet remains the retail industry’s primary growth area.
It’s not a surprise that the Internet is the major growth area for retail, but the year-over-year sales increase of the top 500 retailers in a down economy was higher than expected. And, twenty-nine out of the top 100 are Tealeaf customers. As the web becomes the most dominant sales channel, companies will need to set themselves apart by providing better online customer experience than their competitors. Bruce Temkin of the Temkin Group and formerly of Forrester, calls this “experience based differentiation.”
- Mobile could act as a bridge between the offline and online shopping experience — IR noted that 150 of the 500 top Internet retailers now have fully functional mobile websites or applications. Retailers and vendors are now exploring new ways to target an "always Web connected" consumer. Google Goggles, Apps with Bar Code Readers, and Visual Comparison Shopping Engines are the current offerings that provide the link between offline and online shopping.
Mobile has been the hot topic at many trade shows over the past year. In February, CNET reported that mobile subscriptions were approaching $5 billion in 2010. As mobile devices get faster and smarter, the economy is starting to recover and unemployment rates are slowly decreasing, it is expected that mobile spend will increase even more in 2011. Online retailers who don’t have a fully functioning mobile site and a way to manage customer experience on those sites will suffer.
- Investment in Social Media Moving Beyond Social Marketing — Many retailers have increased their Social Marketing initiatives through a combination of Facebook pages, Twitter tweets, Youtube fan videos, and blogs. We heard from several retailers about pilot projects to increase social aspects in shopping ranging from pre-launch (brand promotion) to post-launch activities (customer service).
Any business that sells products or services online is in grave jeopardy without a social strategy. Social media allows a direct connection with customers, and also enables customers to quickly communicate their online shopping experiences to thousands of people. At this point, we accept this as fact and enjoy seeing our favorite retailers tweeting and updating us via Facebook. One of the things we most anticipate is discovering how companies handle customer service and brand promotion through these channels.
To read Citigroup’s full note on the conference, visit: https://www.citigroupgeo.com/pdf/SNA57862.pdf
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