Online sales climbed 24% year over year, while Best Buy’s overall sales were flat.
As others retreat to seemingly safe strategies, now is the time for the most committed and innovative e-retailers (and the publisher that covers them) to show their stuff
You have to look back 80 years to find a month in which the financial news has been as bleak as it’s been this past month. Trillions have been lost in equities. Trillions more in real estate. And until the federal government took control of the U.S. financial system, a total meltdown seemed imminent. Our government has suspended the rules of free enterprise by passing out capital and loan guarantees to rescue brokerages, mortgage giants, banks, insurers, and auto companies. And still financial markets are not secure.
We all wonder what it means for us. If you are a typical subscriber, you manage or own an e-retailing business that’s been growing at double digit rates since its inception. While that growth is slowing this year, things are not tanking. It’s the future that worries you. The first shoe hit Wall Street; is the other ready to hit you? How do you manage your business in this scary environment?
Internet Retailer covers your industry like no other publisher. Our success is tied to your fortunes. How we approach our business at this juncture says everything about what we think of the prospects for yours. Here’s how we plan to navigate these troubled waters.
First, we are not about to panic about the economy. We do not see a sequel to the Great Depression unfolding before us. The country is not challenged by a natural catastrophe-like the Dust Bowl-that’s wiping out a huge segment of our GNP. Nor are we confronting a worldwide trade war the likes of which paralyzed business in the 1930s. Indeed, world powers are cooperating to respond to the financial crisis as they have never done before. And the stock market crash of 2009 is mild by the standards of the Depression, when the Dow fell nearly 90% from 381 in summer of 1929 to 42 two years later. American companies today are making too much profit for a collapse like that to happen.
Second, as we look at e-retailing we still see a bright future. Overall retail sales are certain to suffer in the coming months from stagnant or declining consumer spending, but e-retailing has been getting an increasing share of retail spending and nothing on the horizon portends an end to that trend. A severe recession, should one occur, would not alter the underlying technological and lifestyle trends that have propelled the growth of online shopping. The conversion of television from the analog to digital age, the merger of TV and the Internet, and the emergence of cell phones with sophisticated web access are just some of the trends favoring e-retailing which will not be reversed by recession.
Finally, we consider the cleansing effect of a recession, when the efficient can thrive even as the deadwood is cleared. It’s easy to prosper during the boom. That’s when greed rules Wall Street and even weak competitors do well on Main Street. It is during the toughest of times when the most efficient businesses can shine. And in the retailing trade, e-commerce operators have easily the most efficient channel.
So as others retreat to seemingly safe strategies, now is the time for the most committed and innovative e-retailers (and the publisher that covers them) to show their stuff. More than ever, this is the time to stay abreast of technology, implement best practices and be in tune with customers. The next three years is crunch time. It’s when the long-term leaders of e-retailing will be determined.