Retailers shift their ad spending from TV, radio and print ads to digital ads.
The new year brings a focus on Facebook and international sales.
Many e-commerce executives are starting 2011 with optimistic outlooks, thanks in part to increasing web sales over the past few months and a sense that global sales and social media will help lead online retail to another successful year.
E-retailers closed the year with record holiday season sales that were up more than 15% from 2009, according to MasterCard Advisors, the consulting arm of the payment card network that tracks retail sales across all payment forms. MasterCard says e-retailers collected $36.4 billion in sales from Oct. 31 to Dec. 23. “I feel e-commerce sales will be strong for 2011 with growth higher than in 2010,” says Ken Burke, founder and chairman of e-commerce service provider MarketLive Inc.
But Brad Wolansky, CEO of The Golf Warehouse, which primarily sells online, wants to see how January goes before making predictions for the year. While Wolansky says his company enjoyed holiday sales growth above the 15% level estimated by MasterCard for e-commerce as a whole, it’s possible the strong holiday season reflected pent-up demand by consumers who had put off purchases during the recession.
If consumers stop buying in January, Wolansky says, “then I have no reason to be optimistic for the rest of the year, because I will consider what happened in the holiday season an anomaly rather than a direction.” He notes The Golf Warehouse, part of multichannel retailer Redcats USA, No. 31 in the Top 500 Guide, also had a strong spring, as did retailers in general, but that sales slowed sharply around Father’s Day in June. July and August were slow, he says. “That scenario, where we had a great outpouring of demand that then came screeching to a halt, is something I hope we don’t see in January.” He did not disclose The Golf Warehouse’s exact holiday sales growth.
Other observers are more bullish.
Consumers in 2011 will drive up the percentage of overall retail sales that come from online, says Fiona Dias, executive vice president of strategy and marketing at e-commerce platform provider GSI Commerce. E-commerce captured 4.2% of total retail sales at the close of Q3, according to the U.S. Commerce Department. When excluding sales in categories not commonly bought online—automobiles, fuel, grocery and foodservice sales—Internet Retailer calculated that e-commerce accounted for 7.5% of retail sales during the quarter.
Executives say they want to keep that momentum going. Dias says she expects more e-retailers will develop global sales strategies in 2011 and also find ways to make more money from social networks. “Social networking will turn the corner from chit-chat to commercial purposes,” she says.
E-retailers may advance sales using social media in 2011 in any number of ways, says Charles Nicholls, founder and chief strategy officer at SeeWhy Inc., an online marketing consultancy. Facebook has tools that let e-retailers allow consumers to sign into their retail sites with their Facebook information, for example. “Up to three times more visitors will log into a web site using their Facebook account than will register on an e-commerce site,” he says.
Additionally, search engines Bing and Google now incorporate social messages and links, such as Twitter communications, into how they calculate search rankings, which Nicholls says should compel e-retailers to pay more attention to online social interactions. “Social integration will become a major focus,” Nicholls says.
Burke likens the attention he expects will be paid to social commerce in 2011 to the attention mobile commerce received in 2010. “2011 will be the year for retailers to test the social shopping concept out,” he says. He says retailers will use social networking sites, particularly Facebook, to sell products within the social network environment.
E-retailers also will extend their traditional e-mail marketing programs into the social realm, says Melanie Attia, product marketing manager for the Campaigner e-mail marketing service from Protus IP Solutions. E-retailers, for example, will increasingly include links within e-mails so recipients can easily post the messages on social media. “2011 will be the year social media extends the reach of our e-mail messages to networks of influencers who share your content, endorsing you to their networks of friends,” Attia says.