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Forrester Analyst Cites Social, Mobile & Green

“The Web is no longer the underdog,” says Sucharita Mulpuru, principal analyst at Forrester Research. Now that ecommerce is fully entrenched in several retail categories, multi-channel retailers must embrace it as a primary component of business success. Mulpuru delivered a keynote address titled The New Rules of eCommerce at the September 2008 Shop.org summit.

Some of the categories that have captured a substantial share of the market through online sales in 2007 include: Computer hardware/software/peripherals 45%; books 24%; music/video 24%; gift cards/certificates 21%; toys/video games 19%; baby products 19%; and consumer electronics 18%. Each of these categories is projected to increase its share by two to four percent in 2008, according to Forrester.

During her presentation, Mulpuru said that multi-channel retailers should focus on several key areas including:

•    Social networking
•    Web 2.0 technologies, including video
•    “Green” strategies
•    Online payment choices
•    Mobile shopping

In a follow-up interview with Retail TouchPoints, Mulpuru offered some cautionary advice for retailers:

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RTP: Does a focus on social networking and mobile work better for younger consumers?

Mulpuru: The jury is still out on social networking and mobile, but things like customer reviews work for everyone. Wet Seal is probably the best site that seems to have some social component that makes sense for business. These things definitely won’t work for an older audience and most of these things won’t work yet for a younger audience either because no clear market need has been defined.

But embrace mobile now, because a growing number of consumers are accessing the Internet from somewhere other than home or work. Younger consumers are key here: Gen Y is more than twice as likely to go online from somewhere other than home or work, compared to 15% of Gen X and 12% of Younger Boomers.

RTP: Do you think “green” is here to stay or is more of a passing trend?

Mulpuru: It is definitely here to stay – our world depends on it. Planet Shoes has carbon footprint offsets and Gap sends most of its products in a polybag.

Up to 54% of consumers look for energy-efficient labels when purchasing products and 38% say they would pay more for products or services that are environmentally friendly, Mulpuru noted in her presentation, citing statistics from the 2008 North American Technographics Benchmarking Survey.

RTP: Do you support a strategy of free shipping with higher priced items or are more consumers likely to prefer lower prices on products with a reasonable shipping cost?

Mulpuru: Lower prices always win and a reasonable shipping cost can win too, but it really needs to be a cost that’s no more than 10% of the cost of the item. But free shipping is an easier message to communicate and retailers can get away with charging higher prices often if shipping is free.

Consumers also are looking for a variety of payment options, Mulpuru noted during her presentation. More than 80% of consumers surveyed are extremely satisfied or satisfied with payment options including Pay Pal, Bill Me Later, eCheck, Gift cards and Google Checkout, according to the North American Technographics Retail and Customer Service Online Survey, Q2 2007.

RTP: Who do you consider the most successfully “innovative” retailers right now?

Mulpuru: Moosejaw, Wet Seal and Amazon are doing some interesting things right now.

Mulpuru cites Moosejaw, in particular, which has successfully integrated in-store and online shopping through the following implementations: Web orders can be retrieved in stores with an email address; Store POS systems can accept web alternative payments; and POS and call center applications have web analytics software.

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