As eRetailers increase prices on products in an attempt to recover margins and reach profitability, many shoppers find the Internet is not always less expensive than shopping in stores.
Following widely reported issues with delivery, consumers are becoming reluctant to shop online for holiday gifts, preferring instead the certainty of traditional store purchases. Companies with delivery guarantees and outstanding service will reap the rewards.
Shoppers are turning to respected click and mortar retailers for their online needs, knowing they can return merchandise to local stores if they need to. Strong offline brands will continue to win online market share.
Amazon.com continues to dominate the retail online traffic tables, yet there are signs that they may loose out to strong traditional retailers in the end, especially when customers still cannot pick up the phone and talk to a customer service representative at Amazon about their order.
Traditional retailers will be able to acquire more experienced eRetail staff because of competing online store closures, allowing the traditional companies to become more competitive.
Price conscious shoppers will increasingly use shopping bots to help find the lowest price commodity products. This will put even more pressure on companies that rely upon low prices to attract customers. The likely winners will be those companies that can leverage their global size to buy product from suppliers for the lowest price (e.g. WalMart, Home Depot).
Niche markets, own-label and non-commodity products will become the main source of revenue for successful (profitable) online retailers.
Pure Internet retailers will collaborate with traditional retailers to offer their customers more services, including the ability to return products locally. This will help traditional retailers by bringing customers to their stores with money to spend.
The market will continue to see contraction in the pure eRetail segment, as more traditional retailers build market share and win traffic away.
Customers will begin to develop brand loyalty with online stores, preferring to shop at stores that offer consistently high levels of service, easy access to customer service representatives, easy returns and high availability of merchandise.
Affiliate marketing will decrease in importance as shoppers use favorite links to go directly to stores from their browser toolbar.
A surge in email marketing will lead to shoppers being highly selective about their opt-in lists. Retailers that bombard customers with email that does not offer some significant relevant benefit will see their click-through rates decline and the number of customers opting out increase.
Traditional banner advertising will continue to decline in effectiveness. Rich media banners that deliver active content over narrow bandwidth will become increasingly effective.
