Experts See Web Sales Leveling Off After Quick Growth

by Mark Friedman  on Monday, Mar. 3, 2014 12:00 am  

“I would think the people at Wal-Mart would be very, very, very worried,” said Charles Fishman, author of the bestseller, “The Wal-Mart Effect.”

Online Growth

Fishman said Wal-Mart officials should be concerned about Amazon’s continued growth. Fishman said one of Amazon’s strong points is that customers can create a schedule to have items such as dog food or toothpaste delivered to their homes. And Amazon’s Prime program allows customers who pay a $79 annual fee to enjoy free two-day shipping on all orders regardless of dollar value.

“You can guarantee that you’re going to get what you want,” Fishman said. “You just set up your shopping list, … and you don’t have to think about it.”

Wal-Mart will continue to invest in its e-commerce, Charles Holley, Wal-Mart’s executive vice president and chief financial officer, said in an earnings call on Feb. 20. A transcript of the call was posted on Wal-Mart’s website.

“We’ve already made significant progress through site enhancements, search capabilities and fulfillment,” Holley said.

Wal-Mart is projecting another 30 percent improvement in its e-commerce sales, to $13 billion in the fiscal year that began Feb. 1.

Online sales overall are expected to continue to grow. In 2014, online sales are expected to be $291 billion, up from a projected $262 billion in 2013, according to the research and advisory firm Forrester Research of Cambridge, Mass.

Rosenblum, the managing partner of RSR Research, said it is hard to imagine there will be a day without retail brick-and-mortar stores. Customers still want to come into a store and handle an item before they buy it, she said.

IBM’s Henderson said stores are now trying to blend the experiences of being online while in the store. While some retailers resent the practice of “showrooming” — checking out merchandise in a store then going home to buy it online — others are encouraging their customers to pull out their smartphones while shopping to compare prices, he said. “A lot of the retailers over the holiday season would price match,” Henderson said.

Other retailers targeted customers while they were in the store with the latest promotions or the promotions that were only available through the mobile application or mobile website.

“What we’re seeing is brick-and-mortar retailers really embracing online shopping as mobile shopping,” Henderson said.



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