Originally published in The Tennessean – January 20, 2008:
http://www.tennessean.com/apps/pbcs.dll/article?AID=2008801200352
Best bet for your next retail location may be on the Internet
By David Bohan
Online retail is a reality no one can ignore. Consumers spent $733 million on Cyber Monday 2007, the Monday after Thanksgiving. That’s 21 percent more than in 2006. Online retail grew by 20 percent to more than $1.2 billion in 2007, according to comScore Inc. (This total excludes online purchases of travel.)
It might surprise you that J. C. Penney attracts more shoppers to its online store than any other multi-channel retailer. Penney’s has developed an Internet strategy that nicely complements its retail store operation. It offers a wider selection online, nearly three times the number of products than in its stores, and it uses its Web site to lure customers into the stores.
Part of the rationale is that its online shoppers are younger, ages 25 to 35, than its regular retail customers. Online sales accounted for 6 percent of Penney’s total sales this year.
Online sales are important, but consider this fact—the share of total online sales that went to retailers that exist only online declined in 2007, just as it did in 2006. Seven of the top ten retail Web sites during the just-ended holiday season belonged to traditional brick-and-mortar retailers.
A study by the J. C. Williams Group and StartSampling focused on multi-channel shopping. It found the most frequent shopping path started online, either when the consumer visited a Web site or when the consumer received an email or an online offer, and ended with the consumer in a store.
The most likely cross-channel shoppers are men ages 25 to 34 who have incomes of more than $50,000.
Another successful online retail tactic is the Web site-to-store model. Many traditional retailers, including Circuit City and Wal-Mart, allow customers to order online and pick up the merchandise at stores convenient to them. More than one-third of Wal-Mart’s online sales resulted from this initiative.
A bonus: 60 percent of Wal-Mart’s site-to-store customers spent an additional $60 when they got to a store to pick up merchandise ordered online.
Of course cyberspace is not limited to computer and electronics retailers and discounters. Saks Fifth Avenue, Neiman Marcus and Armani are expanding their Web presence and successfully marketing high-fashion products at luxury price points.
What are consumers looking for in a Web store? The ability to search within the site must be robust. Consumers want store information, they want to learn what’s new and they want special offers.
Consumers want better imagery and more product descriptions so they can “feel” the products online, and they want checking out to be easy. Hint: Let them add an item to their shopping carts without leaving the page they are on.
So before you start seeking real estate for your next location, make sure your cyberspace location is working well.
David Bohan
BOHAN Advertising|Marketing
www.bohanideas.com
Tags: advertising, BOHAN, consumers, david, ideas, internet, location, marketing, online, retail, shopping
