Despite a stellar 2012—ecommerce sales soared 28 percent for the year—they may be ready to plateau in 2013, predicted Sucharita Mulpuru, vice president and principal analyst for Forrester Research.
Speaking at the National Retail Federation’s Annual Convention & Expo last week, she said one early indicator for a plateau is that this past holiday season, transactions in December were softer than in November as shoppers grabbed early sales. Consumers have also started to show “deal fatigue,” she said.
According to the Forrester/Shop.org State of Retailing Online Report, the bulk of purchases remain concentrated in the November/December months, accounting for 30 percent of volume. While ecommerce now represents about 10 percent of total U.S. retail sales, in the holiday period it captured 15 percent, said Sucharita.
The role of mobile devices in shopping is still uncertain. While there is evidence of increased use for “show rooming” (comparison shopping in physical stores), actual transactions on smartphones and tablets drove less than five percent of all ecommerce sales.
As a result, retailers have been getting gun shy about putting too many resources into mobile developments, said Sucharita. In the Forrester/Shop.org poll, retailers revealed their first digital priority is developing their core web sites, such as improving the checkout process, adding payment options or enabling international selling. And when it comes to preparing for mobile devices, retailers are challenged to know what mobile device to design for. “There is no obvious answer.”
Meanwhile, social media as a contributor to online sales continues to have a “mixed outlook,” said Sucharita. “Facebook has been very, very challenged from an ecommerce perspective.” While social media has shown to have viral marketing and promotional value, “it remains at the bottom of the chart as a driver of sales.” Research has shown that the top ways consumers find out about deals that move them to purchase online are through the brand’s web site and email alerts.
Because of the expansion of show rooming, Sucharita anticipates more retailers will respond with price match strategies, such as those already enacted by Walmart and Target. And to keep their prices stable, some strong brands may seek to implement unilateral pricing policies. “But it won’t happen everywhere,” she assured. “Dynamic market pricing will absolutely be part of the way we shop in the future.”
Bringing more fun to consumers, shopping methods are expected to proliferate with flash sales, daily deals and subscription selling as examples. What won’t change in 2013 is Amazon keeping “retailers up at night” as they wonder what the giant player has “up its sleeve next.”