Retail stores undergoing era of adaption, aided by online catalogs and e-commerce

The physical retail marketplace continually changes due to its susceptibility to multiple variables such as consumer preferences and the automation movement. The initial emerging narrative spelled doom for legacy physical retailers and constructed a future in which e-commerce dominates the retail marketplace. However, new studies and data suggests retailers who have learned to adapt to market trends will persist as consumers find a middle ground between e-commerce and physical retail options.

Against the common narrative, more retail stores are opening than closing according to a study conducted by IHL Group. The type of stores experiencing closures provide an explanation for the direction in which the market is headed. Radio Shack’s bankruptcy and fashion retailers account for a large percentage of the closures.

Many legacy retailers could afford to remain out of touch with their customers before the rise of the internet and prevalence of e-commerce. Consumers now use e-commerce, especially m-commerce options, as research tools to supplement their shopping experience. Such shifts in consumer expectations increased the rate at which certain retailers declined, yielding the retail apocalypse narrative.

 

“The mediocre brands that were protected by scarcity of information, distribution and access are getting blown apart as the customer can now get the same product anytime, anywhere, anyway — and often for less money.”
Steve Dennis, Forbes, 2017

Legacy retailers have had difficulty changing as compared to newer businesses who have leeway to build their business model structured around trends and shifts within the market. E-commerce and the influence of the internet within business is far from a trend as consumers have become accustomed to unlimited information and price comparisons that e-commerce offer. But the majority of retail sales, roughly 80 percent by 2025, will continue to be done in-store according to Forbes.

Businesses have begun to develop an omni channel shopping experience to tap into new trends and the presence of e-commerce. An increasing number of retail sales are influenced by digital avenues,over $2 trillion according to Forbes. For some retailers, this meant re-opening, re-investing or completely revamping their catalog experience. Business such as Patagonia underwent a more journal-styled catalog whereas Restoration Hardware focused on a refined aesthetic.

Dirxion online catalogs have successfully combined the aesthetic and familiar feel of a print catalog with the connectivity and versatility of the e-commerce experience. Dirxion offers custom features such as minimal UI and embedding within an existing domain to create a seamless transition from website to digital publication. And because these online catalogs live within a website URL that is accessible anywhere with an Internet connection, shipping costs are essentially eliminated. Most decisions are a matter of how and when to send an e-mail blast or promote the material on social media sites — an opportunity cost, but not heavy expense.

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E-commerce evolves to fit business models and consumer needs

Near the beginning of its rise to prominence, e-commerce was seen as an “all or nothing” endeavor. Businesses were either entirely committed to a physical, retail presence or built their business around e-commerce. But as the platform has evolved, many businesses have achieved synergy by molding e-commerce to fit their existing business models in order to match the needs of their customers.

While both ends of the spectrum exist, the proportion of customers who make purchases exclusively in-store or online is relatively small and consumers have found a middle ground with their purchasing habits. According to an annual survey conducted by comScore, shoppers on average now make 51 percent of their purchases online. The percentage had slowly risen, sitting at 48 percent a year ago and 47 percent two years ago.

The evolution of e-commerce businesses began as direct delivery, but the market has split into three distinct forms: national shipping (i.e. Amazon), home delivery and pick-up in store. The adaption was spurred on as more retailers moved their inventory online. Consumer activity acted as an incentive for more retailers and businesses to create an online presence. According to the Harvard Business Review, online sales of everyday items, consumer packaged goods, more than doubled between 2006 and 2010. CPG online sales continued to grow by roughly 40 percent annually, reaching an estimated $10 billion in value according to 1010data Market Insights.

 

Businesses of all sizes have benefited from take an omni channel approach by converging their offline and online practices. Digital Commerce 360 recently published a profile on Tractor Supply Co., who saw a nine percent increase in their revenue from last year after implementing their “Buy Online Pick Up in Store” program. The program now accounts for roughly 55 percent of all their online orders, and increased the amount of unique visitors to their website and usage of their “Store Locator” function. “We are starting to see signs that the physical and digital sides of our business are working well together and support one another.” says Gregory Sandfort, CEO of Tractor Supply Co.

Dirxion online catalogs offer businesses the ability to tap into the rising consumer preference for the omnichannel shopping experience and serves as a complementary product to any e-commerce operation. Dirxion online catalogs are versatile and optimized with HTML5 to ensure cross-platform and multi-browser performance standards are met.Dirxion Contact Us

Ulta Beauty’s m-commerce department continues to experience growth

Dirxion customer Ulta Beauty’s mobile traffic to their website increased by 104 percent with their total traffic increasing by 74 percent, according to FierceRetail. The increase is in part due to Ulta’s investments in online advertising and paid promotion programs through social media platforms.

“We continue to update, enhance our mobile apps which at last count has been downloaded by 4.4 million guests and has a 5-star rating in iTunes app store. Traffic for our mobile app is up 450% year over year with 41 million visits during the quarter.”
– Mary Dillon, CEO of Ulta Beauty

Mobile ownership and overall traffic on mobile devices has increased exponentially in the last decade. According to the PEW Research Center, 77 percent of Americans now own a smartphone as compared to 35 percent when the survey was first conducted in 2011. While mobile e-commerce, or m-commerce as its now commonly known as, has risen in popularity the platform still falls behind physical retail sales. However, consumers have adopted m-commerce platforms and the mobile experience as a researching method. Mobile devices have begun to influence offline sales at a greater, yet not always entirely clear, rate.

To explore the connection between retail sales and smartphone ownership, Google paired with Ipsos Media CT as well as Sterling Brands to conduct an online survey. The survey results revealed 71 percent of in-store shoppers who use their smartphones for online research say their device has become more important to their in-store experience. Many businesses, especially within the retail market, have steered away from mobilizing and creating an omni channel experience for their customers. According to GeoMarketing, “Retailers appear to view mobile as a channel for direct sales rather than a medium that can greatly shape consumers decisions of what and where to make a purchase. Retailers still don’t see mobile as a tool that can improve the overall customer experience online and offline in their stores.”

Partnered with Ulta Beauty, Dirxion has provided Ulta with new avenues to connect to their customers by utilizing Dirxion’s integration technologies within Ulta’s mobile applications. The format increases the efficiency in which Ulta can interact with and increase the quality of shopping for their customers. Placed on both the Google Play and Apple iTunes stores, Ulta now has a dedicated mobile audience through which they can extend news and deals to via push notifications.

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Amazon Business nets one million U.S. customers, demonstrates growth in the B2B e-commerce market

Earlier this month, Amazon revealed their Amazon Business marketplace passed the one million customer mark since its launch in April of 2015. According to the official website, “Amazon Business provides purchasing solutions that let registered businesses and their designated users shop for business supplies on Amazon. People who have a business user account can purchase on Amazon.com on behalf of their employer.”

While Amazon has an advantage in terms of their large pool of existing B2C customers, Amazon Business’s growth can be partially attributed to the overall trend of the rising popularity of B2B e-commerce. Amazon.com currently has 250 million registered users and roughly 80 million Prime users. In June, Digital Commerce 360 revealed nearly a fifth of all business purchases were made through Amazon Business. Amazon Business’s conversion rate was just as high, with 24 percent of users having not made a purchase off of Amazon Business a year prior.

Amazon Business has been able to tap into some of the rising consumer preferences with regards to e-commerce. For instance, consumers have reported Amazon Business accounts are quickly set up and all products on the platform can be found easily, tapping into rising preferences among consumers for products to have a high ease-of-use. Because of innovations within the market and the new focus on revolutionizing the consumer experience, B2B e-commerce has and is expected to grow exponentially over the next few years. According to Forrester Research, the current value of the U.S. B2B e-commerce market is $889 billion and is on course to reach $1.18 trillion by the end of 2021.

B2B e-commerce

 

Dirxion offers tools for businesses to capitalize on the shifting trends and growth in the e-commerce market via online catalogs services. Through differentiation of their shopping experience and engaging in the omni-channel experience, businesses can stake a stronger claim within the market. Dirxion online catalogs are versatile and optimized with HTML5 to ensure cross-platform and multi-browser performance standards are met. Dirxion online catalogs can be integrated into existing e-commerce platforms and live directly on a company’s website to ensure a seamless, optimized shopping experience for customers.

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U.S. retail e-commerce continues to grow, supplemented by Amazon

The United States Commerce Department recently announced U.S. e-commerce retail had grown by 16.3 percent during the second quarter, as reported by Digital Commerce 360. According to YCharts, a financial data research platform, e-commerce has grown within the United States as a share of total retail sales at a steady rate since the data was first recorded in 1999.

This recent growth is the largest increase for domestic retail e-commerce in five years, in which e-commerce sales have increased by 16.8 percent over the previous quarter. For over a decade, retail e-commerce sales in the U.S. have accounted for an increasingly larger proportion of total retail sales, currently sitting at 8.5 percent, according to YCharts.

Large corporations and industry-leading tech giants have accounted for a large majority of the retail e-commerce growth. For instance, in Q2 2017, Amazon accounted for 38 percent of the e-commerce growth in the U.S. Said corporations pioneered e-commerce technology such as the omni-channel shopping experience and in-store pick up to meld the physical and digital markets. Marginal profits have increased in companies that have implemented these practices and adopted aspects of their e-commerce platforms into their existing sales channels.

On average, retail e-commerce has become increasingly popular over the years, but the trend of growth isn’t exclusive to the United States. For instance, Digital Commerce 360 reported a similar trend for Canada in which, on a year-over-year average, Canadian retail e-commerce grew by 46 percent. China, the largest e-commerce market in the world, has seen one of the largest growths in the retail e-commerce market. The lack of developed legacy retailers coupled with the rise of dominant domestic e-commerce marketplaces such as Alibaba has lead to an explosion of e-commerce activity and development within the Chinese market. Such activity has prompted companies within the United States to increase their e-commerce presence to combat the increase of the international presence.

Dirxion online catalogs give retailers the tools to fully access the growth within the retail e-commerce market within the United States as well as within the international market. With Dirxion’s integration and compatibility capabilities, online catalogs live directly on an existing e-commerce website. Each catalog delivers an on-brand experience, interactive experience with SEO capabilities. Dirxion online catalogs are versatile and optimized with HTML5 to ensure cross-platform and multi-browser performance standards are met.

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Walmart makes e-commerce adjustments following power shift in international markets

In recent quarters, Walmart reported slowed growth for their e-commerce department. According to Business Insider, the legacy retailer went from 16 percent growth in the second quarter of last year to single digit growth for two straight quarters. Despite rebounding this quarter and online sales growing by 60 percent, according to Forbes, Walmart is looking for new ways to compete within the e-commerce market, especially considering new tech giants have begun crossing international boundaries and increased competition.

American corporations, which have long held market dominance, are finding Chinese tech giants pushing their way into prominence alongside names such as Microsoft, Apple and Amazon. Alibaba and Tencent, China’s largest tech corporations, have each reached values of $400 billion collectively, an accolade previously held exclusively by American corporations. According to Internet Live Stats, China has the largest population of Internet users with roughly 721 million accounting for over half of their total population. The United States ranks third, with roughly 286 million users, but representing 88 percent of the total population. Technology adaption rates have increased within the United States, especially among older generations.

“We’ve come to the point where China has finally caught up with the U.S. in the internet space,” –Hans Tung, managing partner at GGV Capital, 2017

In response to increasing competition in the international e-commerce market, Walmart sold their Chinese e-commerce company Yihaodian, according to Business Insider. Yihaodian was sold to JD.com, one of China’s leading e-commerce platforms, in exchange for a 5 percent stake in JD’s company. According to The New York Times, the Chinese economy grapples with a multitude of difficulties, including rising debt and a reliance on the steel industry.Despite this, Chinese technology and e-commerce businesses reported earnings in recent quarters that exceeded investor expectations. The Chinese retail e-commerce economy has grown without the influence and presence of legacy retailers, unlike in the United States. In China, and other undeveloped regions without legacy retailers, e-commerce platforms have taken hold and experienced unprecedented growth.

Dirxion online catalogs give both retail and B2B companies a tool to create an omni channel approach for their e-commerce businesses. Online catalogs eliminate shipping and printing costs and can be sent anywhere instantaneously. Dirxion online catalogs can support a variety of languages. For example, Dirxion customer Kennametal has a language toggle feature on their online catalogs to support languages such as French and Japanese. Dirxion online catalogs helps businesses to expand their content marketing into new markets previously unreachable, even in international markets while reinforcing relationships and sales routes in existing territories.

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Facebook bans thousands of online advertisers who are using ‘cloaking’ methods

Facebook recently announced their new initiative to combat misinformation and false online advertising practices. Many online advertisers used “cloaking” procedures that would fool Facebook’s filters and algorithms and circumvent the review process. Typically when a business advertises with the social media platform, Facebook looks at the ad that the business wants to display, as well as the landing page that an ad click leads a user to. This is to ensure that the content of the ad and the landing page a user is sent to are related and not misleading.

The change is part of a multi-tiered program by Facebook to weed out misinformation, clickbait and spam in order to entice businesses to advertise on the site and create an incentive for users to remain on the platform. Pages that don’t engage in cloaking methods will see no change to their pages or their existing advertising plan, as the initiative seeks to eliminate advertisers that use cloaking methods. Scammers manipulate landing pages in a way that creates one landing page that appears legitimate to a Facebook reviewer and a separate landing page where the user will actually end up. These pages are often set up to sell diet pills, false muscle building programs and other scams.

Other businesses have made similar decisions, most noticeably Facebook’s other half of the online advertising duopoly, Google. Earlier this year, the company announced they would block certain types of online advertisements from appearing on their browser Google Chrome in accordance to a study from the Coalition for Better Ads. Additionally, Google did their own investigation into third party online advertising platforms, often known as ad exchanges, and discovered global revenue wasted on fraudulent online advertising traffic might reach $16 billion by the end of 2017.

For e-commerce businesses, growing their websites through organic traffic is sustainable in the long run, cuts costs that would be used to purchase advertising space and raises traffic at a higher rate than a PPC program would. Dirxion online catalogs offer SEO guide pages that involves a process of indexing every page of the printed catalog. This practice helps boost the overall SEO of the online catalogs site, as well as increase the likelihood of someone finding a catalog page when searching a company’s brand name.

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Consumers increasingly worried about cyber security, especially with e-commerce

As the world becomes increasingly digitized and more personal information gets stored online, Americans have become more informed about cyber security risks. As concluded through various studies conducted by the PEW Research Center, Americans as a whole have become more skeptical of institutions holding their information and how secure it is. However, as security measures have increased over time, Americans have also had a harder time maneuvering through the complexities of modern cyber security.

In order to conduct the study, the PEW Research Center constructed an online survey and took results from a sample size of 1,055 adult Internet users living in the U.S. The survey includes 13 questions dealing with various aspects of cyber security, asking participants to either pick a correct question out of a field or identify pictures. If a participant feels they don’t know the correct answer they’re able to select “Not sure” in lieu of choosing an answer. The questions get progressively more complex and deal with more modern cyber security concepts. A substantial majority of Americans were able to correctly answer the first two questions, with 75 able to identify the most secure password (from a list of four options) and 73 percent knowing public Wi-Fi (even if password protected) is not always safe for sensitive activities.

Cyber Security

 

While the percentage of participants who answered incorrectly fluctuated by answer, the “Not sure” option became increasingly popular. For instance, 73 percent of participants were unsure if a VPN minimizes the risk of using insecure Wi-Fi networks and 49 percent were unaware that a browser’s “private browsing” mode does not prevent ISPs from monitoring online activity. Despite difficulties identifying complex cyber security concepts, American consumers have become more skeptical and cynical of cyber security, with 49 percent of Americans feeling their personal information is less secure than it was five years ago. A recent history of security breaches has lead to this mentality, with 64 percent of Americans having personally experienced a major data breach. Six of the largest data breaches in history have occurred within the past decade.

Consumers provide some of their personal information when purchasing from e-commerce businesses including their home address and credit/debit card information, which has led to increasing levels of skepticism among American consumers. The National Telecommunications and Information Administration estimates nearly a fourth of U.S. consumers will completely avoid purchasing from an e-commerce business if they feel their personal information might be at risk.

Dirxion online catalogs offer businesses a versatile tool for their e-commerce branches. Online catalog users are protected by SSL/HTTPS for the CNAME or dedicated URL that a publication is hosted on. Doing so helps alleviate the risk of consumers questioning the credibility or safety of the site, providing a more comfortable shopping experience.

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Gap between urban and rural Internet access widens, challenging e-commerce

It was recently reported that in rural areas, 35 percent of Americans do not have access to the Internet (about 25 million Americans), according to CBS News. This is far greater than the 3 percent of citizens living in urban areas who don’t have Internet access. This gap remains in spite of federal courts declaring that Internet service is a utility similar to electricity and water.

The federal court’s ruling touched on the issue of net neutrality, the protection of consumers against Internet service providers throttling data delivery speeds. But the logistics of delivering high speed Internet to rural areas has proved difficult to many ISPs, leaving millions of Americans either without Internet access or with Internet well below FCC standards.

In rural areas, the population is traditionally more dispersed, which leads to homes and businesses that are located far away from ISP hubs. Fiber-optic cable used by ISPs can cost upwards of $40,000, according to CBS News, hindering the performance of businesses in the area and limiting consumer options. In response, the FCC has committed roughly $2 billion in subsidies to telecommunications companies to encourage expansion into rural areas. Local and state governments have also attempted to tackle the issue, often times introducing tax breaks and incentives to telecommunications companies to encourage competition in rural areas.


 

“It’s a challenge of economics, if you will — trying to get further out into the rural network with the density being more and more spread out, population being more and more spread out. It’s a challenge no matter what provider you are,” — Jarrod Berkshire, President of Operations at Windstream, 2017

The United States currently has the third largest number of Internet users (roughly 286 million), and ranks only behind India (462 billion) and China (731 million), according to Statista. However, as a percentage of the population, 88 percent of the U.S. population have access to the Internet whereas 35 percent of the Indian population and 52 percent of the Chinese population have access. The increasing percentage of Americans with access to Internet is connected to the growing rate of aging citizens adopting tech.

Dirxion online catalogs give businesses an opportunity to extend the reach of their business. By eliminating shipping and printing costs, Dirxion online catalogs help businesses to expand their content marketing into new markets previously unreachable. As consumers adapt technology at a faster rate, e-commerce continues to become an increasingly integral aspect to the economy in its entirety.

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E-commerce takes hold in economies with underdeveloped retail markets

Consumers have reaped the benefits of the rise of e-commerce by capitalizing on its emphasis on speed, convenience and accessibility of information. Despite that growth, retail and physical store locations remain dominant due to their legacy status and long-term prominence in the economy. However, in regions where retail locations have yet to take hold, the effects and benefits of e-commerce reach a greater magnitude. The accessibility and reach of modern e-commerce systems make these regions accessible to businesses of all sizes, not just the largest players in the market.

India has become one of the most sought-after markets to capitalize on, with some of the largest international e-commerce businesses competing for market share. As one of the fastest growing e-commerce markets in the world, India has seen an influx of e-commerce activity as Internet access and smartphone ownership grow in recent years. According to Statista, as early as 2015, only 26 percent of the Indian population had access to the Internet; however, that’s 10 times larger than it was nearly a decade ago. That trend is expected to continue, as Forrester predicts India’s compound annual growth rate will be over 30 percent until 2021.


Retail eCommerce Sales

 

E-commerce businesses have also begun to take stake in adjusting the retail experience to integrate online and offline logistics and data along a single chain. Chinese B2B e-commerce business Alibaba, who accounts for a tenth of all Chinese retail sales and 75 percent of online sales, has begun investing in unused retail space in Shanghai and has taken stake in other retail companies to provide big data capabilities to legacy retailers.

In many isolated incidences, smaller economies can outgrow larger economies in e-commerce. Chinese cities are categorized into tiers one to four, based on GDP, government structure and population data. E-commerce penetration for Tier 1 and 2 cities amounts to 89 percent as compared to Tier 3 and 4 cities, which is 62 percent. E-commerce businesses have been expanding their logistical and infrastructure capabilities in order to expand to these more rural markets.

“The online shopper base in Tier 3 and 4 cities is 257 million, a population number that is larger than that of almost all countries in the world (except India, China as a whole, and the United States). That is serious market potential.” — Sara Hsu, Forbes, 2016

Dirxion online catalogs give B2B businesses an opportunity to tap into the developing global e-commerce market. Businesses that fail to include and accommodate for an international market essentially choose to leave sales on the table. Dirxion online catalogs can support a variety of languages. For example, Dirxion customer Kennametal has a language toggle feature on their online catalogs to support languages such as French and Japanese. By eliminating shipping and printing costs, Dirxion online catalogs helps businesses to expand their content marketing into new markets previously unreachable, even in international markets.

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