While Retail Overall Struggles, Online Makes up the Distance

Ed Kountz | June 18, 2008, 05:31 PM

The latest issue of IRNewsLink Top 500 Watch couldn’t have been clearer. The top headline read: Online sales grow at Kohl's, while same-store sales decline. And directly below that in the body, another:
Total Sales Down, but e-commerce revenue up for Foot Locker.
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In a challenging environment for overall retail sales these days, e-commerce remains a bright spot. These anecdotes, and others we’ve heard, certainly support the prevailing JupiterResearch view that online retail is holding up much better, and in fact still prospering, relatively speaking, despite the struggles merchants are waging stores. Our retail analyst, Patti Freeman-Evans, suggests that online retail is still in its new-market development phase, and continues to benefit from new online buyers, as well as existing online buyers migrating spend (for convenience, choice or control purposes) online. This won’t be the case forever, but is helping the online channel in many areas today.
In a tight retail environment, leveraging all options to attract and retain consumers is important to drive increased spend frequency and value (or, at least, to get the sale vs. the competition). One underutilized tool involves payments mix. As consumer payment habits evolve, and the # of online payments optiosn expands, merchants must target the right mix of payemt options to the appropriate mix of customers. With the rise of not just PayPal, but also BillMeLater, eBillMe, Revolution Money and other options, a growing number of merchants have seen just this, and have been adding the market leading options to meet the needs of their evolving customer base. LINK

And while it may seem counterintuitive, making reasonable investments in loyalty is even more important during tight economic times, as consumers who will shop a brand when times are tight can generally be counted on to maintain a relationship with that brand in flush times, all else remaining equal.

On another note, Video is coming into its own on the web. IRNEwsLink Top 500 Watch also reports in today's issue that 59% of Web users view at least one video a week, according to a ShopNBC.com speaker at last week’s Internet Retailer conference in Chicago. Interest in online video is certainly clear among online financial services customers. The keys are effective marketing, content and presentation format, as outlined in my recent JupiterResearch report on the topic.
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