Churbuck on Online Commerce Slowdown

David Churbuck has an excellent piece of insight into the slowdown we’ve seen in ecommerce as reported last week by the New York Times.  The crux of his point (but go to his site and read the whole post, it’s worth it):

Tedious. Memorize that word. Tedious is apt and accurate when it comes to describing the typical shopping experience. How many people dread the same form field fill-out (save those who use the Google auto-complete function), who enter into a shopping cart wondering if they will miss a required field, mistype a character, or run into some strange, opaque security threshold that reject orders that specify a different shipping address from a card’s billing address, or a vendor that screws military and government personnel seeking an APO delivery?

Personally, I believe the slowdown is the result of a couple of factors:

  • Users have changed, but the online ordering process hasn’t – We’ve reached the point that the Internet is just another ordering means to customers.  Thus they don’t see the novelty in ordering online anymore, so they order in the most convenient manner.  Online ordering isn’t always the most convenient way. Perhaps this is due to Amazon owning the one click purchase patent.  Of course, now we’re not so sure we want companies to hold our data.
  • TJX, credit card theft, identity theft and phishing – each of these problems has eroded consumer confidence in the online ordering process.  In the late 90’s, we worried that our credit card data wasn’t safe.  In 2007, we know it isn’t safe online, thanks to the morons at TJX lost control of 47 million credit/debit cards.
  • Online purchasing may be a softer market, hence this may be a first indicator of a general retail slowdown.  First off, let me caution, anyone getting financial advice from me is a fool.  Go to the experts.  That said, I wonder if this isn’t a case where Online is seeing the blip first.  Perhaps online spending tends to be more discretionary in nature, hence the items you’d order online may be the first you slash from your budget.

This is one to watch carefully.  As David suggests, it is quite possible that we’re simply looking at a model that overly due for a change.  His conclusion:

We may be a dozen years into the online commerce revolution, but it still feels like 1995 to me. Let’s “web 2.0-ify” the whole mess and get it to the next level.

Mary Schmidt also posted on this topic this morning, and she gets right to the point:

My Take: Web shopping isn’t a fad. And, I love the Web for business, when that business is done right! The real problem is all those godawful web sites! One has to be really, really, really committed to giving a company money to jump through many of the sites’ shopping hoops. Makes me exhausted just thinking about it. In fact, I’m surprised when I have a positive experience in Web shopping!

(late addition via comments) Evan Schuman at StoreFrontTalkBack.com has also posted on this and makes the point that:

From a strategic C-level viewpoint, how the customer comes to make the purchase—whether it’s online, brick-and-mortar, call center, catalogue, cellphone, kiosk or anything else—is irrelevant, as long as the sale is made. It becomes a strategic concern if the combined revenue starts to drop, but no one is suggesting that that is happening with retail today. This should be reflected in sales commissions and dozens of others areas, where managers are rewarded for helping sales get made, with no one caring in what channel it happened.

A great point – be sure to read his full post…

Further Reading:

Varien Blog – Is eCommerce Growth Grinding to a Halt?
EcommerceOptimization.com – Online Sales Slowing: Shoppers Influenced Online, Buying Offline

2 Replies to “Churbuck on Online Commerce Slowdown”

  1. There is another side to this. The premise of the NY Times piece is that online and offline are distinct efforts and that if one goes up, the other must be coming down.
    But that’s simply not how major retail chains look at it and, as blended E-Commerce (what used to be called multi-channel) takes hold over the next 2-3 years, such distinctions will be quite irrelevant. We took a look at the Times piece this Sunday and tried putting it into a broader retail context. This does seem to provide a different perspective: http://storefrontbacktalk.com/story/061707hiddensales.php

  2. Excellent point – and in your post, you make the statement “It’s dangerous because it perpetuates the misguided—but commonly held—belief that online and offline retail efforts today are distinct.”

    Yup, I’m with you on that. It’s just ordering when it comes right down to it. Yes, there is some portion of the business that your only going to get online, and some that will only order via bricks and mortar. That’s why you’ve got to cover both angles. It’s what your customers expect.

    (I’m adding a link to your article in the main post here)

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