In its second-largest acquisition, Amazon buys the company for $970 million.
A report says that e-retailers will enjoy a 24% sales increase over the five weeks.
Online retail appears likely to be a big winner in the traditional five-week-long winter sales in France that begin tomorrow.
A survey by the Centre of Retail Research for shopping search engine Kelkoo predicts a 23.7% hike in online trade between Jan. 11 and Feb. 14, compared with last year’s sales. The government strictly controls retail discounting in France, setting the dates of five-week sales periods in winter and summer. Beyond that, it allows retailers to conduct “floating sales” for two weeks of their choice.
Boris Saragaglia, founder and CEO of Spartoo.com, a French online retailer of shoes that sells in 27 European countries, says his company generates about 30% of its revenue during the winter and summer sales. Spartoo.com is No. 89 in the Internet Retailer Top 300 Europe.
“We are ready to send more than 100,000 pairs of shoes from the first days of the sale,” he says. “Spartoo.com expects to have more than 4 million visitors on the first day.”
Despite the financial crisis plaguing Europe, Saragaglia says, the e-retailer is growing rapidly, with its revenue doubling from 30 million (US$38.3 million) to 60 million euros (US$76.6 million) between 2009 and 2010 and projected to hit 100 million euros (US$127.8 million) in 2011. While total sales are growing, he says average order value is down around 2%.
According to a study carried out for Spartoo by market researcher Ifop, the economic downturn will increase purchasing during the winter sales, with 70% of the French saving their major purchases for the sales period.
E-commerce, in particular, will benefit, Kelkoo says.
“The amount spent online is continuing to grow, and will reach 3.4 billion euros (US$4.3 billion), compared with the 2.7 billion euros (US$3.4 billion) spent in 2011,” Kelkoo says. “Offline sales, on the other hand, are set to again drop by 0.5%, for an overall expenditure of 23.9 billion euros (US$30.5 billion).”
Representatives of French retail chains admit e-commerce is rapidly gaining ground.
“In the past, online sales were outside the norm,” says Jean-Michel Silberstein, secretary general of The French National Council of Shopping Centers. “This year they will have a real impact, accounting for between 8% and 10% of the consumer’s budget.”
According to Kelkoo, the French will dedicate 12.4% of their winter sale budgets to online purchases, compared with 10.2% in 2011, and 7.8% in 2010.
Some web sites were already seeking to gain the competitive edge on offline trade. Online shoe boutique, Da Shoes, for example, offered 40% cuts a week before the official sale kick-off, and says it is not alone.
“In principle, sales start on 11th January at 8 a.m., but certain web sites started to seriously lower prices earlier,” the e-retailer says in a statement.
“The law prohibits offline and online boutiques to use the term ‘sales’ before that date, but there is nothing stopping them discounting prices by calling them specials,” the retailer says. “Traders realize they have everything to gain by starting to offer inexpensive clothes and shoes before the sales, because sales drop in this period.”
More consumers also are shopping via mobile devices, Kelkoo says. “M-commerce will make its first impact on the sales, with 8% of ‘cyberacheteurs’ (online shoppers) ready to use mobiles as a purchasing method, and spending 270 million euros (US$345 million) via their smart phones and tablets.”