Pureplay ecommerce retailers are disadvantaged by the high cost of marketing and shipping, making their business model challenging and ultimately unsustainable in the long-term, according to a report released this week by L2.
By contrast, the report finds that online retailers leveraging physical stores drive higher organic site traffic and lower customer acquisition costs while elevating brand awareness across multiple channels.
L2’s report stated that brick-and-mortar retailers offering in-store pickup and returns have a competitive advantage. While pureplay e-tailer orders typically net 77 cents on the dollar, retailers that offer both in-store pick-up and returns enjoy an accretive effect, whereby shoppers walk out of the store with 107% of their original basket size after exchanging merchandise and making incremental purchases.
While the intent of L2’s “Death of Pureplay Retail” report is to show the value of being an omnichannel merchant, it should be noted that the report is sponsored by Simon Property Group, a retail real estate ownership, management and development group which, of course, wants shoppers in its malls.
Meanwhile, survey results released this week by RetailNext Inc. show that shopper and retailer perceptions and expectations are not aligned, and that many retail stores lack the essential technology to measure and apply shopper data across all channels.
So while Simon may want retailers to go omnichannel now, RetailNext reminds us all that it’s not as simple as offering in-store pick up.
Here’s a look at this weeks’ news, commentary and events that shaped the direct-to-customer world… and more.
Victoria’s Secret used Snapchat to further pushes the art of organic branding… NICE Systems will acquire Nexidia, a provider of advanced customer analytics… Pitney Bowes launched a major advertising campaign that included broadcast and targeted TV, digital marketing and social media to reintroduce the Pitney Bowes brands… A Los Angeles store is cashing in on Mexican drug lord Joaquin “El Chapo” Guzman’s colorful fashion sense.
And the new name of the merged MarketLive–Shopatron is… Kibo… The unified omnichannel commerce solution also announced it has acquired Fiverun, a mobile POS solution… Starmount has collaborated with Zumiez Inc. to launch the Starmount Customer Engagement Suite and POS solution to re-invent the shopping experience… Rakuten.com held its first Rakuten Super Points Party on Tuesday as a special incentive for Rakuten customers, and awarded 20% back in Rakuten Super Points on all purchases.
Pitney Bowes is expanding its shipping logistics portfolio by acquiring Enroute Systems Corporation, in an effort to its global ecommerce service offerings … JDA Software Group Inc., announced further enhancements to its JDA Warehouse Management. … FedEx is planning a 60,000-square-foot distribution center in Lima, OH. … UPS is planning to add 3D printing technology to its third-party logistics offerings, enabling it to provide light manufacturing as well as light assembly services. … CBRE Inc. reports that the availability rate for industrial property – including warehouses and distribution centers – fell to 9.4% in the fourth quarter, the 23rd consecutive quarters of falling availability, according to the Wall Street Journal.
… And more
FlipKart announced that Binny Bansal is its new CEO. … PayPal appointed Wences Casares to its Board of Directors. …Shopify named Harley Finkelstein as Chief Operating Officer…American Apparel received approval from all voting classes to accept its reorganization plan, it will enable the company to continue implementation of its current turnaround strategy. … Radio Shack aims to renergizes sales with a smaller store footprint under its new owner. Aeropostale announces the elimination of 100 jobs in the corporate office as part of a new cost reduction program… American Eagle to shutter stores and debuts new mobile site. … Healthwarehouse.com appointed Daniel Seliga as Chief Operating Officer and Chief Financial Officer.