Online Sales For Big Retailers May Not Be As Strong As Suggested

[engine]

Rapid growth is one thing, but, from zero it may not represent such a large slice of the retailers cake.

Have the online only ecommerce sites developed such a strong brand that even the big retailers are struggling to compete?

And what about the smaller business? What chance have they now got in today's online environment, which appears to favor big brands?

Nearly two decades after the Web revolutionized shopping, many big retailers are still struggling to turn the Internet into a big part of their business.

Their progress is on display in new correspondence between the Securities and Exchange Commission and a bevy of chains, including Target Corp., Wal-Mart Stores Inc., PetSmart Inc. PETM and Fifth & Pacific Cos. Online Sales For Big Retailers May Not Be As Strong As Suggested [online.wsj.com]

Asked by the SEC to quantify its online results, the discount retailer said in June that "digital sales represented an immaterial amount of total sales."

Target acknowledges that it is still adjusting to consumers spending more online, but says its strategy is to book sales whatever the channel, so it doesn't need to break out its Internet business.

[Rlilly]

> And what about the smaller business?

Unless they in a very specialized niche market, they have absolutely no chance for success online today.

[incrediBILL]

There's several issues here.

RESOURCES: people only have so much money to spend and just because you put up an online store doesn't mean you're going to capture more money. Maybe you'll snare some new customers but in the case of Target, if you aren't a regular Target shopper you may never spend money on Target's website. More often we only go to the website to get items not in stock at the local store.

SHIPPING: most of the online stores don't get the shipping issue and Amazon Prime has them against the rails. Once you pay your annual Amazon Prime fee you don't have a lot of incentive to shop anywhere else because you know shipping will be 'free' on Amazon so that's where you go first to buy stuff, even if it's not the better price because it may be worse elsewhere when you include shipping. That's the glass ceiling they need to crash and it's going to be hard. Walmart gets the shipping issue and often makes it cheaper to buy online than I can afford to drive to Walmart.

SYMBIOSIS: some online stores like Amazon have all the small vendors embedded with Amazon store. You can literally buy anything on Amazon and that's how the small guy gets to play with the big dogs by using an Amazon store and Amazon fulfillment which also gives them access to Amazon prime. Yet another hurdle for the other big brands because when you shop Target, all you shop is Target which is very limited.

[ecommerceprofit]

Wow Rlilly - no chance...that is quite a bold statement. I think you are somewhat wrong...there is plenty of room for the little guy...just a lot harder. I will never admit that that I'm always right...but I like this debate...will be interesting to get other thoughts.

[Chris13]

Target, I believe, has the right attitude about its online site. I believe Home Depot, Office Depot, Lowes, Walmart, etc., will all be similar in attitude.

A person in the store is worth more to them than a person on their site. A person in the store can see so much more than you can on a site and I believe is more likely to leave with more items. You can try on clothes, if you buy clothes at Target. You get to handle the thing and really see what it's like. Is it sturdy? Is it too heavy? Etc.

When I go online for an item I find myself boombarded with a zillion choices, all photographed in a different scale, instead of a scale relative to one another. How can you tell the size of one cell phone compared with another online? You really can't without getting out your ruler. But in a store you can handle both, side by side, get the size and weight.

[dpd1]

There's some things that are simply just easier to go see. I manufacture my own products, and I have many times just walked up and down every isle in a hardware store, looking for things that I can use as parts, or just looking for ideas. In some cases, I have actually gotten ideas for a whole product, just from finding one item at a store. As a regular consumer, it is also sometimes easier just to remind yourself of what you need, by going through the store. Then of course, there's women (god bless them), who for some reason that no man will ever understand... actually enjoy the process of shopping.

If you're selling the same exact brands that a million other people are selling, then I would imagine things are pretty tough now days. But then, there are also those people that have no creativity... They just want to throw up a site and wait for the sales to come in. That most likely will not happen. You have to be a lot more involved than that. But I don't think it's impossible. However, I would say that having your own brands, or your own manufacturing, is certainly better.

[incrediBILL]

Target, I believe, has the right attitude about its online site.

Not sure what that is as I shop in their stores and can't stand their online store.

Walmart on the other hand, is trying to compete with Amazon with lots of low cost and free shipping options, an online MP3 store, etc. including low cost grocery delivery here in the SF bay area so Walmart is way ahead of Target IMO. Slightly off topic but Target doesn't sell to men in the first place as we're delegated a small corner in the back of their stores vs. Walmart putting the Men's section right up front when you walk in the door in many stores so as a man, you know where my allegiance lies ;)

How can you tell the size of one cell phone compared with another online? You really can't without getting out your ruler. But in a store you can handle both, side by side, get the size and weight.

Um, you look at the specs as the sizes are all right there in B&W and easy to compare.

[Rlilly]

@ecommerceprofit - i will rephrase that and say, absolutely no chance for success relying on Google for traffic/conversion to sales. None.

[RhinoFish]

@Rlilly -- "absolutely no chance for success relying on Google for traffic/conversion to sales"

Organic, PPC, both?

[Rlilly]

@RhinoFish no chance of success relying on Organic traffic if a small business launches a site selling products many other large companies sell. Unless you in a specialized niche.

PPC is also becoming difficult for small business to compete and conversion rates seem to be dropping more and more even while costs go up. You got to have deep pockets and be prepared to spend a lot to get a customer.

[ecommerceprofit]

Rlilly - I cannot prove it...but I use Google for ppc and organic and I am moving up in the rankings...super slow...but I am...it's harder but over time I know success will come.

[JS_Harris]

Unless they in a very specialized niche market, they have absolutely no chance for success online today.

I have to agree, if yours is a business that sells a product which is also available from a big brand department store the odds of getting natural search traffic from search engines is very low. That's not because your store isn't a better place to buy, it's because the department store is more trusted by search.

Search results have turned into yellow pages when it comes to products, big box stores get featured first.

[CainIV]

I would agree with Riley. To be honest that ship sailed eons ago.

The best place to gain traction is to develop something new - a new unique product, that the big boys are then forced to stock out of popularity.

[Tonearm]

My apologies, but is there any way to subscribe to a thread without posting in it?

[blend27]

That's not because your store isn't a better place to buy, it's because the department store is more trusted by search.

Bingo!

We had a very healthy niche for the last 11 years or so. Niche was comprised of about 3 dozen online/BM shops that imported widgets from Europe and sold it in US and Canada. Some overseas orders came in once in a while as well. Every widget is 100% unique, there are no 2 widgets alike.

About 4 years ago one of the Distributors, over-glammed by an opportunity and lack of technical skills at their establishment opened an Amazon Store, placing about 50 different widgets there. Cheap stuff, really bad images of the widgets. People who bought it left bad reviews on widgets pages due to quality, mismatched products delivery and late shipping.

We(other sites) had quality widgets, perfect images and unique descriptions(content). We used to recommend each other sites for the matching designs of widgets to our customers. Links from our widget pages to other sites in the industry. 100% natural linking, does not get anymore honest and clean than that.

We Dominated the SERP and competed in ADWORDS around the holidays. The SERP was HEALTHY.

That was OK until all the zoo updates started happening.

There is an EMD that has been online since 1996. Industry Leader. Recognized by every widget maker in the world, has thousands of quality incoming links from authority sites, several EDUs linked to it from research papers published by actual professors, Several Newspaper articles with research done by real people that actualy have a clue about the niche history.

Now it is Outranked by Amazon, EHow, Ebay and other Big Box sites(they dont sell the widgets, but have SEO to death articles on how to clean them), several FaceBook pages that have nothing to do with the niche for the past 2 years. EMD is Below the fold for the Main key phrase, which is also their domain name. Our site(10 years old now) was #2, #3 for 7 years for that term, now on page 7 on Google for our About Us URL. Other search terms SERP is either Domain Crowded by Ebay and Amazon or scrapers or affiliates with contents from Ebay descriptions.

Before all the ZOO stuff we had a healthy 50,000 unique visitors a month, Very Small Niche, but very fruit-full. Now, 2000, if that...

I am talking about Google SERP here. Bing(Yahoo) is somewhat OK, Yandex SERP is clean and healthy.

We used to get together about twice a year to meet with widget makers, a conference of sort. Out of 3 dozen site mentioned previously, 14 remain online, buried in SERP on page 3-4. The rest are out of business. Many of the widget makers are also out of luck.

It only took little over 2 years... :(

[RhinoFish]

Imo, the opportunities to whip the big boys, in your non-commodity niche, are still plentiful.

[incrediBILL]

You got to have deep pockets and be prepared to spend a lot to get a customer.

Or an imagination.

Deep pockets is a brute force marketing method opposed to going viral or disruptive.

Zappos, Amazon, etc. were viral and disruptive and look where they are today.

Most people that "can't break through" just can't figure out how which is different from whether it be done because it can and people do it every day.

Blendtec is an excellent example of a company doing marketing with no budget. They made a cheesy video that went viral and then made a bunch of additional cheesy videos. Sales went thru the roof and the didn't dip into deep pockets to make it happen.

There are other ways too but we're drifting off the topic which is whether big retailer sales online are as strong which I addressed long ago in the fact that there's only so much purchasing power out there to spread among all the sites. I don't see the big store getting that much additional sales because they go online but I would except them to fulfill orders potentially lost by one poorly stocked store when the online warehouse has everything.

Some smart big stores point customers to the online store right away, some even have terminals in the store to allow customers to order online which is a really clever way to avoid losing those sales.

I was in a store once where they didn't have the size of shoe I needed and the clerk actually ordered it for me and handed me a receipt and a delivery time in 3 days.

That's how you do it. Some get it. Some do not. Too bad for them. Wah.

[blend27]

... in the fact that there's only so much purchasing power out there to spread among all the sites...

Agree with You 1000% there, but have You ever tried to run an ECom Store in the past 10 Years? anyway...

I have recently moved & spent close to 5K USD online in the past 2 month on things that I was able to see online, but not in the actual store when visited, took me 3 1/2 weeks to complete my shopping list.

As well as finding a product and adding it to the Cart at Major Office furniture Chains(3 of them), only to find out that it is out of stock, and after I supplied the Shipping and Billing info. Several days later I got printed coupons junk mail for things I did not need.