Posted by Ian McCue, Content Manager
Attendees of the Internet Retailer Conference & Exhibition (IRCE) left Chicago last week with a renewed sense of optimism. The future of internet retail looks as promising as ever before, as it eats up an increasingly big piece of the $5-plus trillion retail industry.
Industry experts and leaders from a wide variety of retailers shared trends, best practices and their vision of the future. Unsurprisingly, Amazon’s growing market share and strategies for both leveraging and competing against the retail giant were a popular topic.
Read on for highlights from the conference:
Ecommerce shows no signs of slowing down
In 2017, internet sales accounted for 13 percent of all retail sales and that number could climb to 25 percent by 2024, according to Internet Retailer editor-at-large Don Davis. In his State of the Union address on ecommerce, Davis noted that digitally native brands – i.e. those that started online – saw a 55 percent spike in online growth.
He identified the “three scariest things” about Amazon, starting with Prime’s hold on affluent shoppers. Seventy-five percent of households with an income above $100,000 are Prime members, meaning Amazon has earned the loyalty of the most sought-after customers. Davis also pointed to Alexa’s lead in conversational commerce, as 11 percent of U.S. homes now have the device (Google Home is the next-closest competitor at 4 percent). Perhaps most alarming is that Amazon does not need to turn a profit in retail. In fact, it lost about $500 million in retail last year, making up for those concessions through Amazon Web Services and other verticals.
Driving online sales with in-store pickup
One of the few industries that has been slow to gain traction online is grocery. Meijer, a Midwest retail chain that sells groceries, electronics and household goods, encouraged shoppers to embrace ecommerce with in-store pickup. Customers can shop 80,000 SKUs online, then select a pickup date and time anywhere from three hours to seven days in advance. The shopper parks in a designated location where a Meijer associate greets them, handles the payment and loads groceries into their car.
Supporting buy online, pick up in-store required tightly integrated technology. Meijer’s ecommerce platform needed to communicate with the point-of-sale system to provide fulfillment instructions, handle out-of-stock products/substitutions and send out customer alerts. From a store perspective, Meijer repurposed cafes and stocking areas into staging areas for completed orders. It built carports to handle pickups at the initial stores, but at other locations it opted for reserved parking spaces to save on startup costs.
Making the case for Seller Fulfilled Prime
About three years ago, Amazon launched a program called Seller Fulfilled Prime that allows companies to offer customers free two-day shipping while fulfilling and shipping the products themselves, rather than through Amazon. But many sellers have reservations about adopting Seller Fulfilled Prime (SFP) because they must ship orders the same day if the customer places an order by 3 p.m. local time and it must arrive within two days. However, companies can choose the Prime-eligible regions that make business sense.
Quick Candles is an ecommerce store that sells event supplies and decorations, and CEO Rob Latham detailed the tremendous benefits his company enjoyed with SFP. The program was a perfect fit for Quick Candles because it had lower rates negotiated with its carrier, most orders already shipped same-day and it can reach two-thirds of the U.S. in two days via ground shipping.
The online retailer saw a 25-40 percent increase in sales of items with the blue Prime badge while also gaining more buying power with carriers and suppliers. Latham recommended companies that have the ability to ship same-day sign up for an SFP trial, but start slow with just a few Prime-eligible items.
What does the future of retail look like?
In the years to come, retail will be an integrated experience where the lines between in-store, online and voice shopping are blurred, according to Erin Jordan of public relations firm Walker Sands Communications.
She shared a number of fascinating statistics from a recent Walker Sands survey, including:
- 57 percent of consumers shop online at least once a month
- 42 percent of consumers receive 1-2 packages from Amazon per week
- 25 percent of consumers own a voice device and 20 percent of that group uses the device at least three times per day
Jordan predicted brands that create a “lifestyle,” don’t ditch their physical presence but reimagine it and find ways to drive adoption of voice will excel in the years to come.
How to drive sales with Amazon marketing
Since Amazon accounts for more than 40 percent of all online sales, it is a critical place to not only sell but also market your products. Chris Perry, senior director of ecommerce for Kellogg’s, and Melissa Burdick, Amazon veteran and CEO of day1digital, shared tips on how to maximize your marketing spend on Amazon. A few suggestions from Perry and Burdick:
- Boost SEO by including misspellings in hidden search terms and figuring out the ideal way to structure item names for search.
- Reviews are critical, and you can improve them by responding to negative reviews, answering questions, and participating in the Amazon Vine reviews program.
- When using product display ads, which appear on product pages, target competitor listings with higher prices and lower ratings.
- Optimize your product pages with rich “above the fold” and “below the fold” content and images, with special consideration for mobile displays.
- Use automation tools for keyword research, competitive intelligence and reporting to optimize Amazon paid search efforts.
The findings and advice of these retail veterans are great takeaways that can help your business succeed in this ever-evolving field. While today’s environment is intensely competitive and presents an array of new challenges, there is limitless opportunity for companies who build the experience customers seek.
To make sure you are ready to take advantage of the continued growth of internet retail, learn how to make a next generation store a right now store.
Posted on Thu, June 14, 2018
by NetSuite filed under