Web retail sales to dodge effects of slowing economy - News.com
Despite a slowing U.S. economy, online retail sales will continue to grow at double-digit rates for the next several years, but it will begin to take a turn toward maturity by 2012, according to new research from JupiterResearch.
U.S. online retail sales are expected to reach $148 billion in 2008, up 19 percent from sales in 2007 and comprising about 6.4 percent of total retail sales. That figure will grow to $166 billion in 2009 and $215 billion by 2012, for a compounded annual growth rate of about 11 percent, according to JupiterResearch analyst Patti Freeman Evans.
With so many customers flocking to the web to purchase products, the question is how to translate the experience of a great retail location to bits and bytes. Right now most internet retail sites are servicing the price sensitive, but do a poor job at attracting and selling to people that need advice. Those sales are transacted in the real world, mainly with salespeople that the customer trusts.
For many things, especially electronics, I reached a point long ago where I stopped listening to the CompUSA salesman harassing me because they just spouted out worthless drivel that they heard from someone else. 90% of all my purchases now go through Amazon.com mainly because of their collection of product reviews, which I feel that I can trust because they are unbiased.
That still doesn’t really get me to the point where I feel comfortable purchasing something that I don’t know much about. When I go to a restaurant, I always ask the waitress what the best or most popular items are, because that is my only way to gauge the food. Similarly, when I have limited info, I want to trust someone, but often I just have no idea where to turn.
On the web, I think there is a huge potential for websites targeting niche vertical markets, not just as a catalog of products, but to give advice on the products that are the most relevant, then step back and let the customer decide. There are a number of these companies being built, including www.csnstores.com and www.ivgstores.com amongst many others, but they still don’t go deep enough into the teaching aspect that I think most consumers are interested in.
The site that has done the best job that I have found is www.massage-chair-relief.com. I signed up for their free white paper and they had a series of articles that were automatically sent to me, helping me to feel comfortable that I had a basic understanding of the market and product offerings. I was looking at a big ticket purchase for my mother’s birthday, and not knowing a lot about massage chairs, their content and automated delivery did a fantastic job. All it took for them to do that was a little time creating the content and then setting up the automation, but I don’t doubt that it has dramatically impacted their sales and conversion ratios.
There’s a wealth of sales out there not being closed on the internet because even with all the Web 2.0 buzz, most sites have yet to understand how to gain consumer trust. Any aspiring entrepreneurs out there willing to take on the challenge?
Loading ...