It’s time to grow again, and the Internet is the way to do it. But it’s not your older brother’s Internet—the web of the 2010s will require e-commerce players to know as much about the iPhone and Facebook as they do about Google and UPS.
The heightened importance of the web in the post-recession economy and the growth spurt in web-related technology were the two themes that emerged from the Internet Retailer Conference & Exhibition held in June in Chicago.
“The e-commerce industry is once again growing at historical double-digit rates and there’s urgency for e-retailers to reboot and reinvent their businesses in the wake of a long and deep recession,” Internet Retailer publisher Jack Love said in welcoming attendees to IRCE 2010. “Judging from the record attendance at this show, you have all gotten that message.”
Indeed, the 6,432 attendees at IRCE 2010 easily shattered the previous record for e-commerce events, the 5,148 who attended IRCE 2008, and represented 33% growth over the 4,826 who attended last year’s Internet Retailer conference in the midst of the recession. The 417 companies exhibiting at IRCE also made it the largest display of e-commerce technology and services ever under one roof.
Many attendees stopped by the navigation desk staffed by consulting firm FitForCommerce for advice on how to find the services they sought in the exhibit hall.
Over four days, attendees heard from 175 speakers from online retailers of all kinds—web-only merchants, retail chains, catalogers and consumer goods manufacturers—and from companies large and small. Speakers emphasized it’s not enough to get caught up with the latest web technology, as competition is pushing retailers to innovate, whether that’s by figuring out the secret to closing sales via Facebook and Twitter, or getting better at the nuts and bolts of e-commerce, from paid search to site design.
IRCE’s keynote speaker illustrated how even the most venerable retail chains have moved the web to the center of their growth strategies. Imran Jooma, senior vice president and general manager of e-commerce at Sears Holdings Corp., described such initiatives as MyGofer.com, where consumers can order online for pickup at stores or home delivery of groceries in some areas; the new Sears.com marketplace where other web merchants can sell, adding 12 million products to the site’s selection in the past year; and Sears’ various mobile initiatives, including a PersonalShopper app that lets a consumer send a photo from her mobile phone to a Sears employee who will find the item and let the consumer know where and when she can pick it up.
“When customers want something, they want it today and they want it now,” Jooma said. “So we center our efforts on giving them choice, convenience and value.”
At Whitney Automotive, which once generated the lion’s share of its sales through catalogs, the shift has been even more wrenching—after nine years of web investment e-commerce now accounts for 80% of revenue, Geoff Robertson, general manager and vice president of e-commerce, explained in a featured presentation.
And retailers are going to have to invest more in the web, he said. He pointed to studies showing that retailers on average invest less than 2.5% of annual sales in technology, while web-only merchants spend 7% and top e-retailer Amazon.com Inc. a hefty 19%. “If you are trying to compete at that 2% you are going to be at a loss,” Robertson warned. “You have to try to find ways to break through those constraints.”
The threat to entrenched retailers comes from nimble, web-only merchants like Shoplet.com, which, despite competing against such major chains as Staples, Office Depot and OfficeMax, has reached $100 million in annual online sales by Internet Retailer estimates. Shoplet CEO Tony Ellison explained in a featured speech how he competes against much larger companies: “Find their Achilles heel. Find a simple need that the big boys are not doing.”
As an example, Ellison showed how Shoplet.com appeals to customers concerned about the environment, popping up a “Green Replacement Available” notice when a shopper places an item in her cart for which the retailer offers a more environmentally friendly product; one click provides details and prices for both items.
With consumers and small businesses increasingly willing to buy online, especially commodity items like office supplies, Ellison said, “It’s never been a better time to compete online.”
E-commerce took off fastest in the U.S., but other countries have caught up. Cosmetics maker The Estee Lauder Cos. Inc. has gone after the opportunity to sell abroad, launching 200 web sites in 40 countries. Each site is tailored to the local market, explained online president Dennis McEniry in another featured presentation.
Estee Lauder carefully studies the product and payment preferences in each country, as well as delivery preferences. In Germany, for instance, 60% of consumers pay on delivery, while 30% of the Chinese customers pay at the post office, he said.
As big as the international opportunity is, when it came to growth the biggest buzz was about reaching consumers through mobile phones and social networks like Facebook and Twitter.
Stephanie Tilenius, Google Inc.’s first-ever e-commerce chief, predicted e-commerce will grow largely through mobile commerce, social media and personalized and local search. M-commerce in particular will be critical, she said. “We are betting on mobile,” said Tilenius, a former eBay executive who joined Google in February. “We believe the mobile web will be bigger than the PC web.”
Among the pioneering mobile retailers reporting on their experience was Eoin Comerford, vice president of marketing at Moosejaw Mountaineering, a retailer of outdoor and casual apparel. Comerford emphasized that mobile marketing is highly personal—“What could be more personal than being in your pocket?” he asked.