Why online retailers are bullish about growth
The inaugural E-Commerce Performance Indicators and Confidence (EPIC) report from SLI Systems has found 80 per cent of online retailers worldwide are forecasting an increase in revenue this quarter and 94 per cent are investing in growth initiatives.
This confidence is reflected Down Under too. Almost all online retailers in the Australian market plan to grow their product range this quarter (92 per cent), while two thirds plan to invest in new technology (62 per cent) and expand their teams (62 per cent). A further 31 per cent will add additional websites or brands.
“There’s definitely a mood of optimism among the NORA ecosystem,” Paul Greenberg, CEO of the National Online Retailers Association told IRW.
“I’ve noticed a dramatic rise in online sales at established retail companies, while pureplay retailers have had very solid growth and terrific momentum,” he said, but also cautioned that online retailers cannot afford to let their guard down.
“We have to watch our costs. Supply chain is still a challenge. The cost of getting product to our customers is proving to be an expensive exercise for many e-retailers,” he said.
Better, cheaper, faster
Pressure to reduce delivery costs is even more urgent with the expansion of e-commerce giants, including Amazon and Alibaba, into Australia. The EPIC report found nearly half of Australian respondents are more concerned about Amazon than they were this time last year.
Andre Eikmeier co-founder and joint CEO of Vinomofo, said improving deliveries will be a key priority for the online wine retailer in 2017.
“Outside the cost of the product, delivery is the biggest cost in the sale. There’s the old adage about better, faster, cheaper – that you can only choose two. But it’s critical that we find a way to do all three,” he told IRW.
Vinomofo is currently exploring the possibility of bringing the delivery process in-house, with its own fleet of vans and drivers. Although nothing has been decided yet, Eikmeier said, “If you’ve been sitting on the same solution for three years without trying new things, chances are it’s no longer working for you.”
The EPIC report also found that while 28 per cent of US respondents and 40 per cent of UK respondents are targeting new markets as part of their growth strategy this quarter, only eight per cent of Australian retailers will approach new overseas markets this quarter.
On this point, Vinomofo is the exception to the rule. It is pursuing a rapid international expansion plan in a half dozen, primarily Asian, markets, and has a local presence already in New Zealand and Singapore.
“Asia is a particularly fantastic opportunity for us. What we’re seeing from our launch in Singapore is that our product is really needed and can be game-changing in those markets,” Eikmeier said.
“The opportunities are out there for everyone, but it’s not easy to launch in a new market.”
Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.
Inside Retail Polls
Inside Retail Directory
Global online art marketplace wants to be Pinterest for e-commerce. https://t.co/ejRbJG3aCi2 hours ago