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~ your visitors ! ~
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(excerpt from the Economist Dec 1st issue)
The internet was supposed to batter traditional retailers. Instead they are coming to dominate it !
Despite concerns about a fall in consumer confidence putting the brake on store sales, online purchases are soaring in most countries. But something else is happening, too. Increasingly, the websites run by conventional retailers—once considered dinosaurs of the bricks-and-mortar age—are growing the fastest. Indeed, on Thanksgiving day itself, the number of visitors to Wal-Mart's website exceeded those visiting Amazon—the first time that has ever happened, says Hitwise, which monitors internet usage.
Conventional shopkeepers might be late coming to the internet, but they now realise that they can offer more to their customers online, and that the technology required to do so is relatively easy to use, says Michael Silverstein of the Boston Consulting Group: “Retailers are starting to recognise that their most profitable customers...find the convenience of an online offering complementary to an in-store experience,” he says. As examples of successful exponents of this in America, Mr Silverstein points to Neiman Marcus, which has taken a lead in online top-end fashion, Victoria's Secret in lingerie and Circuit City in consumer electronics.
Circuit City was a pioneer of the “pick-up in-store” option, which is proving increasingly popular with internet shoppers. Around half the customers buying goods online from Circuit City collect their purchases at a shop. For this holiday season the company is offering what it calls a “24/24 Pick-up Guarantee”: if goods ordered online or over the telephone are not available for collection at a local store within 24 minutes of purchase, the customer can claim a $24 gift voucher.
Apart from instant consumer gratification, why would someone want the convenience of buying online only to trek to a store to take delivery? There are, it appears, many reasons. Some people want to examine items before they accept them; some want to save on delivery costs; others want to avoid hanging around for the delivery man to call. But for many, the chief reason is that they trust a big retailing brand with a local store—not least because they will know where goods can be returned if there is a problem.
With more than 3,700 stores in America alone, this hands Wal-Mart another big advantage. It is developing services that link the web with its stores, such as e-mailing digital pictures and picking up the prints.
Does this mean retailing giants will come to dominate the web just as they do the high street? Some might carve out large chunks of cyberspace. Tesco, for instance, has a huge 30% share of the British grocery market. Online it is even more popular: Nielsen//NetRatings says almost 70% of online shoppers plan to buy groceries this Christmas from tesco.com.
But even the big traditional retailers still face competition online. For instance, Wal-Mart may have more than five times the annual sales of Target, but Target's website is growing faster and, according to some analysts, the average value of an online sale at Target is roughly three times more than one made online at Wal-Mart. This is one reason why Wal-Mart is now offering more upmarket goods on its website, including diamond rings.
So, should Amazon have stuck to books? Jeff Bezos, its founder and chief executive, does not think so and likes to plug his site, with its growing army of other traders, as offering “earth's biggest selection”. Nevertheless, he is spreading his bets. These days Amazon also sells its e-commerce experience, helping to run the websites of big, traditional retailers such as Target and Britain's Marks & Spencer.
