Credit Crunch Hits Offline Retailing

April 14, 2008

I have a feeling that some of the blank faces I was seeing in my audience at Shop.org last September when I mentioned the unthinkable ‘R’ word have finally seen the light. If $100/barrel oil translating to $4/gallon gasoline hasn’t provided the wake up call, then I have a feeling the changing face of offline retailing has. Truth is that gas and food (prices also rising) come first, which means that clothing and furniture merchants are not having the best days.

As the NYTimes points out, “Retailing Chains Caught in a Wave of Bankruptcies.”

The article lists the following retailers in financial distress, closing stores, or scaling back operations:
Levitz (filed for bankruptcy protection)
The Sharper Image (filed for bankruptcy protection)
Linens ‘n Things (possibly filing for bankruptcy protection soon)
Foot Locker (closing 140 stores)
Ann Taylor (closing 117 stores)
Zales (closing 100 stores)
Domain (filed for bankruptcy protection)
Wickes (filed for bankruptcy protection)
Fortunoff (filed for bankruptcy protection)
Harvey Electronics (filed for bankruptcy protection)
Lillian Vernon (filed for bankruptcy protection)
Bombay (filed for bankruptcy protection)
J.C. Penney (scaling back or delaying expansion)
Lowe’s (scaling back or delaying expansion)
Office Depot (scaling back or delaying expansion)
Lane Bryant/Fashion Bug (closing 150 stores)
Wilsons the Leather Experts (closing 158 stores)
Pacific Sunwear (shutting down Demo – 153 stores)

Citigroup’s #1 takaway from ChannelAdvisor’s Catalyst Conference point to continued rosy times for online retailing (read full report):

ChannelAdvisor clients not yet seeing macro-economic slowdown
– Biggest surprise to us was the general consensus among the retailers we spoke with that they were not seeing much impact from macro-economic headwinds (…yet?). Consumer spending remains strong in many categories and sellers were confident that their multi-channel strategies can continue to fuel growth.

But I think Mark Mahaney’s comment that the majority of the sellers at the conference are just now expanding beyond eBay explains a lot of this optimism:

Key item to remember here is that most of the retailers who are clients of ChannelAdvisor are primarily eBay sellers and many of them are only just now expanding beyond eBay into other marketplaces (i.e. AMZN or Overstock), comparison shopping, and in early stages of search engine marketing.

Understand that I’m not predicting all doom and gloom regarding online sales. Growth in online sales will still handily beat growth in offline sales. I’m just not expecting the rosy predictions of 17% growth (Forrester) to come in anywhere near on target. There will be plenty of merchants that buck the trend, particularly the savviest online marketers using analytics and expanding to new online marketing channels.

More on our fragile economy soon…

2 Comments | Comparison Engines, Metrics/Data | Permalink
Posted by Brian Smith

NexTag Adds Product Data – Search Volume, # of Sellers

April 12, 2008

As a marketer who started using Goto.com back in 1998 and religiously used the search query volume data at inventory.yahoo.com back in the day, the lack of transparency on the shopping engines has never sat well with me.

While I think we’re still a couple years off before the shopping engines release truly actionable Google Adwords-esque data (search volume, traffic estimator, referring keyword info, etc.) it’s nice to see NexTag taking a very small step in this direction.

While NexTag has long published historical pricing information, the company is now sharing data on Number of Sellers for a particular product and Number of Leads per Month. Just click on the Price History tab or Price History chart to access this information.

Here’s information for the Microsoft Zune 30GB Digital Media Player:
NexTag Data

Hopefully this is just the start. The more data the shopping engines share with merchants, the smarter the merchants will become and the more money they will spend…unless, of course, the whole industry is built on a deck of cards.

The shopping engines have a treasure trove of information that they could share. And this data will not only help merchants, but sellers consumers as well. John Middleton pointed out months ago that NexTag displayed a ‘purchase rate’ level. Here’s the screenshot. NexTag has since removed this feature, but it’s an interesting data point that could help drive sales to high quality merchants.

I believe that part of the success of Google Adwords has to do with the openness of the system. It’s hard to comprehend that the shopping engines don’t have even rudimentary APIs. If they want to get started, they should just take a look at Google’s documentation.

I’ve said it many times – this is what sophisticated merchants are used to, so they’ll expect this of the shopping engines as well. If merchants don’t get it, they will always think of the shopping engines as a marketing afterthought.

1 Comment | google adwords, NexTag | Tagged: | Permalink
Posted by Brian Smith

Ad:tech San Francisco – April 15-17

April 12, 2008

ad tech san francisco

I’ll be jumping in and out of sessions at Ad:tech this week if anyone wants to meet up. Or maybe you just want to wish me happy birthday on the 16th!

Smarter.com is the only shopping engine at the conference.

Register before April 15th for a free expo pass that includes all keynote sessions.

Leave a Comment » | Conferences | Tagged: | Permalink
Posted by Brian Smith

Yahoo! Shopping Sports Sleek New Homepage

April 12, 2008

Yahoo! Shopping was running a test on a new homepage design, but it now seems to be official.

Old look:
Yahoo Shopping homepage design

New look:
Yahoo Shopping homepage

Sadly the rest of the site hasn’t changed. But you have to start somewhere…

Leave a Comment » | Yahoo! Shopping | Permalink
Posted by Brian Smith

Thoughts on Google’s Search within a Search

April 12, 2008

Google started testing it’s search within a search feature more than a month ago. As I said in my initial post, the important things to note about the new functionality were 1) the Google Shopping link and 2) the ever-present Google Adwords listings.

In Bob Tedeschi’s NYTimes article on March 24, he went with the shocker of a headline: A New Tool From Google Alarms Sites. In the article, industry pundits like Alan Rimm-Kaufmann expressed concern over the feature. Ice.com’s ever-present VP of Marketing, Pinny Gniwisch said “Google’s new feature did not appear when users searched for Ice.com, but he said he would object if it did.” And the article pretty much stated that Amazon had requested that Google remove the Amazon search within a search feature.

When the feature first launched, Borders, BestBuy, and OfficeMax were the other large retailers discovered to have the feature active. BestBuy is the only retailer that still seems to have the functionality live.

The main point I picked up from Bob Tedeschi’s article was that the basic problem publishers/retailers had with the new functionality was that Google is selling Adwords ads against brand names. A big no no in the eyes of so many.

But the most important line in the article is Alan Rimm-Kaufmann’s quotation: “Some of our retail clients have pretty horrible site search,” he said. “So for them, this will be a benefit.”

Well, I’ll go a step further and say that this will be an extremely popular and well accepted program for 1000s of retailers.

Why?

Because it’s not only that some retailers have horrible site search, it’s that 10s of 1000s of retailers have a long way to go to providing a smart shopping experience. When sites don’t have proper site search, proper categorization, and don’t provide a logical UI, consumers can’t find anything or at least give up fairly quickly.

There are a lot of factors which contribute to a low conversion rate for retailers, but with Google search within a search, 10s of 1000s of poorly thought out sites can benefit because Google will bring consumers directly to product pages.

And while I agree that the creme de la creme of the brand name retailers will not put up with Google Adwords ads featuring competitors next to their precious content, the creme de la creme might represent less than 1% of all internet retailers (there are only 400 IR top 400 retailers out of about 300,000 online merchants).

Some portion of the other 299,600 merchants on the web are going to be fine seeing competitor product listings right next to their own. In fact, 1000s are already are used to it. Amazon might not want Google to display competitor listings in Adwords ads next to Amazon search within a search content, but Amazon enables a similar ability on Amazon.com through its Marketplace and Product Ads programs.
Read the rest of this entry »

Leave a Comment » | Amazon, Comparison Engines, Google AdSense, Google Product Search/Google Base | Permalink
Posted by Brian Smith

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