It’s hard for small retailers to get noticed, especially as consumers begin product searches on Amazon rather than search engines like Google. In addition, it’s hard for small retailers to gain economies of scale to drive down the cost of pick, pack and ship. Large public companies with deep pockets like Amazon can continue to innovate and find ways to attract consumers. Smaller players in e-commerce can hope to develop niches that draw business and challenge many of the big guys through better website design, better content and better customer service.

EVERYTHING is on the inevitable lifecycle. Ideas are launched, they grow, mature and die. Unless they are reinvented — and the time to reinvent is during the growth phase, not as they are on the downward slope to demise. In other words, both the big and the small will get smaller. It’s time to reinvent!

Gallup reports that 32 percent of online shoppers are “disengaged” retail shoppers. That seems to mean that while they are in your online store, they don’t want to be. Of all shoppers it’s 25 percent who are disengaged with the retail environment.

Each year competition only gets more fierce. The benefits go to the early mover (Amazon) and sets the rules upon which all must compete — existing players as well as new entrants. This is a natural path for new industries.

Challenges facing smaller players? It’s all about raising awareness with their target market and scaling their business while simultaneously lacking the deep pockets of bigger players. But the one key challenge for online retailers of all sizes is understanding how consumers use different devices and a mix of online shops, social media networks and physical stores to explore, research and make purchases. This enhanced understanding is likely to shed light on current metrics such as the notoriously low mobile device conversion rate.

We’re good at measuring discrete metrics such as conversion rate but lag in assessing the influencers and contributors to that conversion.

As we noted a few discussion ago, Amazon Prime membership increased by over 3,000,000 people. From a behavioral point of view, that means that 3,000,000, more people are likely to go to Amazon first to do their online shopping. If they do and if they find what they want, they will go no farther. The loser will be the guy who used to win by the online shopper searching and exploring. That window seems to be closing.

E-commerce increased over 20 percent. If the small guys are staying flat, the big guys are getting the business. Remember, two of the key components for shopping online are convenience and speed. If the shopper can get it done with one site, it is all over for alternative sites.

Ian Percy talks about disengaged shoppers. I believe we are going to see the percentage of disengaged shoppers continue to rise, both online and in stores. Retail continues to become more functional and less emotionally satisfying. So we feel less. Feel nothing, do nothing.

We have to have supplies, so we shop. But, in the end, if we don’t really care, retail brands become meaningless. And there are fewer and fewer retailers who have the strength and the financial power to really differentiate. The whole cycle frankly makes me sad.

It’s hard to be absolute with a survey like this — situations vary so widely from retailer to retailer. But fundamental marketing has always indicated that online purchasing was important, but restricted by shopping behavior. So what’s reported here comes as no surprise.

This past year we even saw the limits on e-book sales appear as those sales flattened. (Electronic reading is only good for a portion of books.)

It’s striking that rather than acknowledge that there may be fundamentals of consumer behavior behind this, Forrester suggests it’s an executional problem. This is a disservice to retailers.

Retail’s biggest opportunities remain in the store as always. The last thing most retailers need to do is continue to be distracted from their big opportunity to seek tiny gains in online business.

I read somewhere that there are 800,000 online retail sites. That’s crazy. We went from the brick ditch to the clicks ditch. Recently, some of these sites closed or sold because they had hit the wall on growth. As in the past, a specialty chain struggled to surpass $1 billion in sales. Online sites struggle to scale up too.

There will be consolidation so some will get larger as some go away. As is always the case, relevant differentiation is the challenge.

Or as is often heard in the c-suite these days, “retail ain’t for sissies.”

The issue is market need and product differentiation. There is virtually no opportunity to sell another slightly differentiated product online, just because you can sell it online.

The elephant in the room though for the online (e-commerce) specialty retailers is teaming up with their brick-and-mortar cousins to do omnichannel. The smaller e-commerce company wins by lowering customer acquisition costs, and the brick-and-mortar retailer wins by not having to build out and maintain their own e-commerce capabilities.

There are known fixes for some of these challenges but we’re still seeing a minority of retailers implementing them successfully. Mobile conversion rates low? – Go beyond just responsive design and actually charge your UX team to design for mobile first. Consumer behavior is shifting toward mobile shopping, so now is the time to become known for the quality of your mobile experience. Dependent on promotions? – Implement a trigger-based digital marketing program if you haven’t already and then work to progressively profile your base so that you can personalize their on-site experience as well as the communications and offers they receive. In addition to these tactics, online and multi-channel sellers should think hard about their strategy. Who is your consumer and why would they want to shop you online vs. the competition? Does your assortment, expertise or content give you an advantage that you haven’t fully leveraged yet? Also, unless you are an online pure play, don’t think about eCommerce in isolation, rather think about your business as a whole and how the different… Read more »

Limits are seldom included in forecasts involving online retail. Maybe there’s a perception that the Internet can reach everyone everywhere all the time. Well, that’s not right.

And just how many retailers can you fit out there? That might be unlimited, depending on how you define “retailer.”

And finally, what portion of the massive consumer product catalog will consumers buy online?

Right.

Would love to hear answers, but I’m pretty sure no one knows these things. Maybe we’re entering an era where growth is more influenced by dillution than it has been since the first online sale. And when/what was that, btw?

The big have plenty of room to get bigger. The small will not get smaller, they will likely expand the online market overall and grow as companies themselves. Playing in this is getting easier and easier every day. Even the smallest player with the right approach and assistance can grow and thrive as a retailer with current and expanding technology. We haven’t even begun to imagine where this can and WILL go in the future. And the fact that we can’t makes it even more exciting! We are in such early stages of an evolutionary revolution that we aren’t even able to conceive the nature of the changes and possibilities that lie ahead. To make a comparison to where this is today, compare it to the space race of the last century. In that evolution, the scientists (retailers) are still working on the rocket engine. The challenges are the same for large and small. Execution along with the technology remains the driver. It’s important to have a strategy, to not let the distractions keep you… Read more »

I think innovation is the key to continued growth. Amazon’s fearlessness has kept it at the front of the pack and made it top of mind of consumers.

The biggest issue that online retailers are facing is differentiation. If consumers don’t know why they should choose you over your countless competitors, then they won’t. It’s a matter of sticking out with unique products, great prices/policies, and helpful customer service or risking getting left behind.

I suspect the economic factors of maintaining a web presence and the increasing practice of vendors not selling to internet-only sellers will narrow the playing field, giving more market share to those remaining. Most likely the bulk of that will go to the big guys as it is a lot easier for them to get attention in cyberspace.

I have the pleasure almost every day of watching all ages of consumers use an assortment of communication devices and software to find what they want immediately. It is most interesting how social media and Google are eating away at the large e-commerce companies dominance in the market. Instead of visiting sites and struggling with a search the consumer simply asks social media colleagues or Google where they can get a whatchamacallit or a needed service. This leads to almost immediate response with very precise “where to find it” results.

Always remember that in any aspect of information technology dealing with large amounts of information and data, it is speed and powerful easy-to-use software that is the key to the consumer’s reliance and continuing use. And 21st century consumer reliance now owns more customer memberships than loyalty programs, word of mouth referals and name/brand recognition.