E-marketingclass: Department Stores Delve into the Virtual

In the world of online retailing, Amazon reigns king. But, as the old game goes there's always someone pushing their way to be the new king of the mountain. This is the new way of online retailing, as seen in the Chicago Tribune article, "Stores try to blend real, virtual worlds: Retailers connect shoppers to out-of-stock items on Web" by Andrea Chang. Chang tells of how major retail stores like JC Penny and Macy's are now moving their customers to their online kiosks and high tech registers. This movement helps the stores with out of stock items that aren't readily available in the store and or different options, such as more size and color choices. Though department stores online retailing has a long way to go before they reach Amazon's status, their rapid growth is definitely a clear sign of something positive as Chang states, "Online revenue still accounts for a small percentage of total retail sales. Although online sales totaled $134 billion last year, the National Retail Federation estimates that's only about 7 percent of all retail sales. But growth has been rapid, with online sales soaring nearly 400 percent since 2000." Retailers are taking advantage of this growth, since it means less inventory needing to be in the store, as well as sales clerks. The growth is something retail stores don't want to lose; executives are constantly thinking of new ways to entice consumers whether with using e-commerce such as free shipping and a faster checkout. Companies don't want to lose out as Chang informs, "As e-commerce continues to grow at robust rates -- the sector posted a 10 percent year-over-year sales increase in the first quarter, according to market research firm ComScore Inc. -- experts have predicted that online sales could grow to as much as 30 percent of total retail sales over the next few decades." These numbers only justify that if retailers are going to continue, they need to adapt even further with their online presence, as well as continuously grow with ever changing e-commerce.

It will be intriguing to see how brick and mortar stores will have to change to the intangible of the internet. Many stores that have been recognized by their retail presence for decades, such as Macy's, now have to start from scratch when they enter the online market. Though retail stores have the crucial intangible asset of their brand name to work with, they still have to find out how to gain with online profits. Though retail stores have the right idea with introducing online kiosks in their stores so customers are able to have a choice if they want the physical store or the website, there still are a lot of unknowns they have to deal with. Aspects of customer service, returns, personal selling, and commission are all things that stores need to consider when incorporating a stronger online presence. As noted in Chang's article, Nordstorm was having problems with their customers having questions about the merchandise, therefore leading to them introducing a Web chat feature for shoppers to speak with informed specialists. Macy's has introduced a user "profile" where customers can store shipping and billing information, as well as receive special discounts and free shipping, while JC Penny's allows customers to view their store catalog online and to join their Facebook page. Though these are all good ways to get started the retailers need to think further of getting customers to shop at their website, and not at their competitors.

The best way retailers can get customers to their page is the use of e-commerce and e-marketing, with e-mail updates or utilizing the use of social media with Facebook and Twitter. Though some companies have already started using these they also need to think of other organic ways to entice customers so they can see how effective their marketing is. JC Penny's, Macy's, and Nordstrom's all have sponsored links on Google, but this isn't enough for the companies since they are already so well known, they want to add customer value to their website. Right now, all the retailers are at a "click and mortar" level, since they can't get completely rid of their stores they should not try to get to a pure play level where they're purely dot com. This is benefit to the retail stores where they can boast, unlike Amazon and Zappo's, customers can check inventory online and order something then pick it up in the store. This also helps retail stores since they typically having an older cliental, not of the "Google generation." Retail stores have the ability to segment themselves to all age levels, where computer savvy customers can utilize their websites, while customers who are more comfortable with going to the actual stores can be helped by the kiosks in place and customer service.

The crucial thing the retail stores want to do with their e-marketing is to set themselves apart from Amazon and other mega websites, they want to find a way to make a niche online. Retail stores want to utilize their business intelligence; they already know the fashion trends that will set them apart, now they need to find out the online trends that will place them as a forerunner. Though the stores want to be set apart from Amazon, they can observe what makes it such a major competitor from its one-click purchasing, deep discounts, large inventory, and fast shipping. Amazon's popularity clearly shows that this is what customers want. Macy's, JC Penny's, and Nordstrom's can all use these as a goal base for their websites, but then grow from them. They can use their traditional advertisers to see what new online markets are opening up for them to take advantage of. Such as, Macy's works with celebrities from Tommy Hilfiger, Martha Stewart, and Sean John that can all create special online events, such as chatting with the celebrities or offering unique brand specials other companies won't be able to offer. Stores can also turn themselves into "apps" for smart phones, where customers can see the newest trends or sales going on. They can also have a locator button so that customers can see how close they are to the nearest store. These are only some ways retail stores will be able to gain on the ever growing online retail sales.

 

Shopping cart applications on Facebook…too much or just right?

In the Wall Street Journal Article "Merchants Push Sales Through Social Media; Early Adopters Add Shopping-Cart Apps to Fan Pages to Sell Items, Services" by Sarah Needleman details how merchants are using their Facebook and MySpace pages to attract purchases through offering sales and services to their fans. Fans will be able to see items for sale on the social media pages and then be directed to the company's website to purchase the items. This increases traffic for the company's main website, as well as gives incentives for people to become fans of different company's pages to receive special deals. Though sales through social media seem to be a great idea for many companies, it is more effective for company's who already have a large fan base. For companies who don't have many fans, they would have to combine marketing for their page and their sales as well to see any true profits. As seen with the article the company, Guitar Syndicate has seen an increase of 17% since their online social media sales offering has been offered, but in the same instance Sun & Ski Sports has only seen social media sales offering 1% to their online sales. There also is a fee for adding shopping cart applications, starting at $24.99 but with the possibility to increase if more items are being offered for sale. This is new territory that is being incorporated with social media sites and it is intriguing to see how consumers are and will react to it.

Adding shopping cart applications to social media sites is an intriguing topic because it seems to be one of the few untapped markets within social media. Now with it being offered by companies, there can be a mixture of excitement and also wary. Companies can be willing to add the applications since it can mean more traffic onto their actual website, as well as their social media page. But, as noted before, companies have to make sure that they already have enough fans to be profitable. Therefore, adding a shopping cart application could mean increased marketing henceforth increased costs the companies have to face. There is also the fee of adding a shopping cart application as well as Face book stating that they are going to have a 30% share of sales for various virtual goods. Companies, especially ones on a smaller scale, are going to have to weigh the pro and cons of adding this application. It could lead to greater online sales and fan traffic on their pages, but it could also mean financial headaches.

Pushing sales through social media is significant since now the majority of the population, whether in the United States, Europe, or anywhere else with constant access to the internet seems to be on social media sites. Now people are in a minority if they aren't on Facebook or Twitter, updating their status, or other checking their friend's pages. With adding shopping cart applications now people have access to the entire market without even having to look up from their phone. It does seem to be the way of the future, since online sales have only been increasing every year and every major company offering a website with purchasing options. Though shopping cart applications on social media sites can definitely be seen as an advantage to the consumer and to the companies, there can also be a backlash. Consumers are more vocal than ever and with allowing consumers to shop on sites like Facebook and MySpace the direct response of the consumer can be gained almost instantaneously. This means if a consumer has a great experience and loves their purchase they can post that, but it also means (more often than not) consumers can inform their dissatisfaction with a purchase or a company as well. With consumers having the ability to post their opinions the company's are facing a potential threat with bad word of mouth spreading as quickly as someone can press "post."

Perhaps, the biggest factor right now of adding shopping cart applications is the ambivalence of it. Since it is such a new aspect of social media, there are few companies who have true knowledge of it leading to great uncertainty. There is definitely a clear bonus for companies to incorporate it into their social media pages since it can easily, and somewhat cheaply, increase online sales and help promote the company. But, there is also the resistance of consumers feeling that companies are invading too much into their lives, as well as privacy issues regarding personal finances specifically with Facebook facing recent issues with their privacy policies. People don't want to have their identity stolen, especially on sites where they are their most personal connecting with family and friends. Overall, if the shopping cart application does increase in popularity and more companies adapt it there most likely won't be a lot of resistance, since the consumer can look at the potential of increasing the ease of shopping even more. Also companies who use it and the social media sites that incorporate can look forward to increased sales if shopping cart applications become popular. Though there can be some backlash, one can also look into the recent past and see that there was original backlash when MySpace was introduced or when Facebook changed their formatting, and now these things aren't even mentioned of anymore. But, only time can tell with shopping cart applications and how they will fare in the future.

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First blog.

First blog posting. Just want to make sure everything works OK!