Retail-Blog

Today is the day the nation's publicly held retail chains begin reporting sales results for the 2006 holiday season. While January's gift card redemptions prove an important component when assessing holiday sales results, December’s numbers usually are thought of as the best indicator of holiday success.

Comparing holiday numbers is difficult since some retailers report on the exact calendar month, others use a five-week reporting period, and still others report results from both November and December. All the numbers listed below are for same-store sales.

Until recently, technology for increasing online conversion rates has generally been the domain of large retailers.

The high ROI (Return On Investment) associated with increasing online conversion rates is driving retailers of all sizes to now focus on the technology. Online conversion occurs when a website visitor becomes a buyer. A conversion rate of 5% means that 5% of the new visitors to the site have searched the site, found the item or items they want and have made a purchase. Even small changes in conversion rate translate into big revenue dollars. For example, if a site doing $20 million in revenue increases its conversion rate from 3% to 4%, revenue would increase by almost $7 million.

According to the Company's press release, Internet-based sales in 2006 at retailer Coldwater Creek Inc. increased 33% from 2005 to $263.7 million from $198.3 million, the company reports. Internet sales represented 25% of the company`s total sales in 2006 vs. 25.4% in the year earlier. Fourth quarter Internet-based sales were up 35.4% over the year-earlier quarter to $98.4 million from $72.6 million and represented 26.8% of total sales vs. 25.6% a year earlier.

Companywide sales reached $1.05 billion for the year, up 35% from 2005. Companywide sales in the fourth quarter were $366.6 million, up 29.1% from $283.9 million a year earlier.

During a recent Webcast focused on improving conversion rates in online retail, Rob Garf, Vice President, Retail Strategies for AMR Research stated that 73% of retailers recently surveyed by AMR Research say that improving online conversion rates is their top priority this year. Online conversion occurs when a website visitor becomes a buyer. A conversion rate of 5% means that 5% of the new visitors to the site have searched the site, found the item or items they want and have made a purchase. Even small changes in conversion rate translate into big revenue dollars. For example, if a site doing $20 million in revenue increases its conversion rate from 3% to 4%, revenue would increase by almost $7 million.

AMR Research also identified the top customer acquisition method during its recent survey. The Top 5 customer acquisition methods are:

1. Direct Mail/Catalogs
2. E-Mail Marketing
3. Search Engines like Google and Yahoo
4. Affiliate Marketing
5. Brick and Mortar Stores and store displays

Also interesting was the fact that retailers surveyed said that traditional advertising such as print and TV advertising has the lowest effectiveness in gaining new customers and actually decreased in effectiveness since 2001 as an acquisition method.

According to Hitwise, the leading online competitive intelligence service, Google accounted for 64 percent of all US searches for the four weeks ending March 31, 2007. Yahoo! Search, MSN Search and Ask.com each received 22, 9 and 3 percent respectively. The remaining 48 search engines in the Hitwise Search Engine Analysis Tool accounted for 5 percent of U.S. searches.

Forrester Research estimates that online research influences more than $400 billion in in-store sales, and predicts that figure will exceed $1.1 trillion by 2012. But consumers often go to one retailer’s web site to check out a product, then buy it in another retailer’s store. “That means there’s a huge opportunity for retailers to engage customers across channels,” says Tamara Mendelsohn, author of Forrester’s new cross-channel sales forecast report. 51% of online shoppers say they research products on the web and then buy them in stores. And 45% of them say they buy additional items once in the store, spending on average $154 on those other items. Asked why they purchased the product offline rather than on the web, the most common answer was to obtain the product immediately (51%), followed by wanted to see the item before purchasing it (42%), did not want to pay shipping costs (40%), and it was more convenient to buy offline (27%).

70% of leading online retailers report that visitors who use web site search tools were more likely to convert from browsers to buyers, according to the Aberdeen Group. And Aberdeen’s research survey also revealed that more than half of best-in-class retailers use site search as a merchandising tool, according to “Web Site Search: Revenue in the Results,” a new report from Aberdeen Group.

Among best-in-class retailers, 62% continually fine-tune search for desired results based on user actions, current promotions and collective behavior, Aberdeen found. Half of these retailers segment search query results based on different attributes of product categories, and that number of retailers will grow to 92% in the next 24 months.

Welcome back to the future! Remember the success of industry exchanges during the Nineties? It turns out that Web sites, like fashion, have cycles of nostalgia when what was old is new again. At least that's what's happening at eSourceApparel.com.

eSourceApparel.com (www.esourceapparel.com) is quickly becoming the central business hub for the global apparel industry, reporting an average of 10,000 hits per week and a steady increase in new members since its March 21 launch.

Each year, Internet Retailer, the leading information provider for the e-retailing industry, looks at the Top 500 online retailers to provide a logical ranking for America's largest e-retailers based on their annual sales on the web. The all new Top 500 Guide contains the very latest competitive data on the leaders of web-based retailing who account for nearly two-thirds of $135-billion e-retailing industry in the U.S.

Click on the link below to read datapoint excerpts from the new research.

According to Nielsen//NetRatings MegaView Retail Report that measures online consumer retail activity and purchasing behavior, the Lane Bryant web site had the highest visitor conversion rate of any e-Commerce site tracked by Nielsen in the June, 2007 report on May, 2007 activity. Visitor conversion rate is the ratio of buyers to visitors at a web site. It is the key metric by which all commerce sites measure themselves, because it is directly related to revenue.

Cosmetics leader Estee Lauder has announced that it has closed down its site -- Gloss.com -- after six years of operation effective at the end of June, 2007. Gloss.com was one of the leading stand-alone e-commerce sites, ranked 180 in the Internet Retailer Top 500 sites and featured deep content and tools that enabled shoppers to personalize beauty product purchases.
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The site offered shoppers nearly 5,000 products and was originally launched as a partnership between Estee Lauder and such consumer brand manufacturers as Chanel S.A and Clarins.
Over the last few years, Estee Lauder emerged as the majority owner. The company has decided to close down Gloss.com and concentrate on better serving customer needs on its other commerce-enabled web sites such as Clinique.com and Aramis.com.

In light of the well-know data compromises including TJX Corp reported earlier this year by the retail-blog.com, Visa USA announced a program earlier in the month of July designed to help the nation's small businesses improve their security.

Visa's program calls for acquiring financial institutions to strengthen their existing data security efforts to identify and address risks among their small merchant customers, including identifying whether merchants are storing sensitive account data and are complying with the industry-wide Payment Card Industry Data Security Standard (PCI DSS). Visa has long required all entities, including small businesses, which store, process, or transmit Visa cardholder data, to comply with PCI DSS.

According to comScore (www.comscore.com), a leader in measuring the digital world, total U.S. e-commerce spending for the second quarter of 2007 climbed to $47.5 billion or an increase of 19 percent over the same period last year. Non-travel (retail) e-commerce grew 23 percent versus year ago to $27.2 billion, while online travel spending increased 14 percent to $20.3 billion.

Its October and the Holiday shopping season is rapidly approaching. Good news, right? It is if you are an online shopping site.

According to a recent survey by Burst Media and a related press release, the percent of consumers who expect to complete either a portion or all of their holiday gift purchasing online this year has surged to more than half (50.7%), up from 37.6% in 2006.

While increasing use of the Web for holiday shopping is a positive sign for Internet retailers, there are also signs of economic uncertainty among consumers. Survey results indicate holiday spending is likely to decline from 2006 levels for many consumers. Among survey respondents, one-quarter (25.6%) expect to reduce spending, 36.1% will spend the same amount as the prior year and only 16.8% expect spending to increase. These conservative spending estimates are true even among the highest income segments.