Double Digit Sales Growth and Babies Online

Mar 18, 2011

Online sales have never been healthier. Last year consumers
pushed online 

revenues up nearly 15 percent and a new study by eMarketer projects
solid year-over-year increases for the foreseeable future.

While the same research
shows growth slowing as online matures as a channel, it also points to more
and more consumers researching and making purchases while digitally connected
via a variety of devices. According to eMarketer,
148.1 million people 14 and older will go online and buy something this year.
By 2015, that number is expected to jump to 170.3 million.

"Most of the growth in ecommerce is coming from incumbent online buyers
shifting more of their spending from stores to the internet rather than from
the spending power of new online buyers," said Jeffrey Grau, principal
analyst at eMarketer.

Looking even further into the future, a new report
released this week by education non-profit organizations Joan Ganz Cooney Center
and Sesame Workshop would seem to suggest that even greater numbers will be
shopping online in the years ahead. Kids today are literally going online,
it’s assumed with the help of others, almost from birth. Today 80 percent of
children between zero and five go online at least once a week.

Discussion Question: Will sales through digital channels ever eclipse those made in brick and mortar stores? What factors, demographic, economic, technological, etc. do you think will be the biggest drivers of online sales over the next 10 to 25 years?

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5 Comments on "Double Digit Sales Growth and Babies Online"

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Paula Rosenblum
11 years 2 months ago
You know, it’s interesting to see how much has changed in the decade (plus a couple of years) since we last asked that question. The answer back then was “never” because the cost of marketing a pure-play eCommerce company was almost always (eBay and Amazon excluded) too pricey. And people really did enjoy the social experience of going to stores. In the ensuing decade: – Continuous payroll cuts in stores have made them really inconvenient to shop in – Social media and Google ad words has given eCommerce retailers a way to get their name out there, and prove they are competitive on price and quality. Plus, social media has given people a new way to interact socially – Web sites themselves have become easier to shop, more targeted and in general more appetizing – Gas is getting absurdly expensive I think retailers are at a VERY serious crosswords with regard to their stores. The old self-service airline paradigm doesn’t work. While we’ve been prophesizing it for years, the day of reckoning is now here.… Read more »
Paul R. Schottmiller
Paul R. Schottmiller
11 years 2 months ago

The horizon is long enough that a prediction is not very meaningful. In general, we know the online channel is growing faster, but it is still only in the 6-10% range of overall retail (depending on how you define the categories). There are also wide differences across customer segments and geographies. It does appear reasonable to predict that by 2020 online will be contributing more annual growth revenue (in raw dollars) than physical stores.

The numbers game aside, the reality is that the concept of separate channel will be less relevant over time. The channel where an item is finally purchased, will be less important than how it is purchased. Retailers should be looking at the broader question of how/when/where will online activity be influencing shopper behavior (irrespective of channel of final conversion).

Chuck Palmer
11 years 2 months ago

I want to buy Paula a drink. I agree. Reinvention is at hand and happening. Some are further along than others. Experiments are happening. Lessons being learned.

In the coming years we will see a blending and melding of the reasons and ways people make purchase decisions–digital, social and economic. These absolutely should effect the way retailers and brands approach their consumers. The physical store and the digital store become one in our pockets and there are huge opportunities to create immersive experiences with your customers.

My advice to my clients today is think about this as a constant two-way conversation with your customers. There are many places and ways to keep that conversation going and you have unique things to say and talk about. Build the right engagement strategy and invest in the technology, places and people to execute it seamlessly.

Ed Rosenbaum
11 years 2 months ago

I read Paula’s comments and agree with much of what she said. What it boils down for me is we have to find strong reasons to push customers to visit the stores. The rising cost of gas; which adds to and becomes the true cost of the purchased items is making it much easier for the consumer to purchase online. Multitasking, today’s key words for survival in a difficult time, saves both time and energy. So why not go to work, purchase your needs on line then wait for them to be delivered?

Personally, I prefer to visit the store, see and touch what I want. But the reality is I do not want to add the cost of my time and gas to make the trip.

Kai Clarke
11 years 2 months ago

Of course. As the digital experience continues to become more realistic, we will not need to “go” anywhere. The online retails sales number will not only continue to grow, but will eventually outgrow the brick and mortar sales.


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