As analysts expect e-commerce sales in the U.S. to continue growing by 10 to 12 percent a year, total e-commerce sales are already at substantial levels as traditional brick-and-mortar retailers have expanded their online efforts. Online retailers have significant advantages over brick-and-mortar competitors in several ways, including the ability to reach a wider geographic market, the lower overhead costs, and the ease of tracking consumer browsing and buying behavior. Customers cannot try something on when buying online – at least not until they receive it. With fast delivery and easy returns this limitation can be overcome to some degree, but not completely.
For example, Best Buy , the largest retailer of electronics in the U.S. in August 2014 reported its tenth consecutive quarterly dip in sales, citing an increasing shift by consumers to online shopping. For a retailer who makes sales online from clothing, this can lead to significant complications.
In its latest fiscal year ended January, Wal-Mart generated online sales of $13.7 billion, a fraction of its total revenue of $482.1 billion. The site boasts more than 160 international designers and stocks hard-to-find online labels such as Balenciaga and Tod’s. ECommerce retailers should be aware how the items they sell are treated for tax purposes in different states.
Some online stores have real-time chat features, but most rely on e-mails or phone calls to handle customer questions. Amazon is an in unique position to know what the best price for products are, and they’ll naturally price there to make the retailer the most money. Amazon’s pure e-commerce revenue represents 74.1 percent of total sales while number-two Wal-Mart has e-commerce revenue of just 2.8 percent of its total sales — which indicates that the world’s largest retailer has plenty of room to grow online. Though online shoe sales account for 3.6 percent of all online retail sales, it’s a crowded market with some 1,166 online shoe sellers. Signet, a UK based company, is the largest US specialty retail brand capturing a major chunk of the US jewellery market with its 1,221 stores in 50 states.
If you’ve niched within a particular industry, having a physical shop is quite important, in fact many big players have gone from a purely online offering to opening up shops to support their business and credibility. Efficient inventory management is even more crucial for your online store as shipping costs and discounts and promos eat into the profit margins and you have no option but to make your supply chain lean to reduce costs. At the same time, he began presenting collections in a see-now, buy-now format, where ready-to-wear pieces are available to purchase online or in the store immediately or soon after being presented on the runway.