Welcome to our new E-Commerce Insider newsletter, a morning email with the top news and analysis on the e-commerce industry, produced by BI Intelligence.
ONLINE LUXURY SALES BOOM: Online luxury sales are growing twice as fast as the overall market, according to a new report from McKinsey. Last year, online shopping “directly generated more than 13% of offline luxury sales and influenced another 28% of sales.” Consumers typically purchase big ticket items in-person, leading many luxury retailers to overlook e-commerce. However, it’s increasingly clear that’s a mistake — luxury shoppers are typically very digitally-connected, wielding smartphones and tablets while they shop. These consumers are likely conducting a great deal of research, too. Luxury retailers should therefore view their websites and apps as resources that can inform a consumer, provide information about products, and directions to the nearest stores. (McKinsey)
RETAILMENOT’S DEPENDENCE ON SEO: RetailMeNot relies heavily on search engine optimization to maintain its $US1.8 billion empire shelling out coupon codes to shoppers. Recent filings with the SEC revealed that 63% of RetailMeNot’s Web traffic originates from search results and 96% of its revenue comes from affiliate commissions on sales. The company leverages the fact that many consumers search for promo codes before making a purchase online. Therefore, RetailMeNot’s strategy is to be the first result that bargain hunters find when searching for discount codes on search engines. For example, out of 263 coupon-related keywords — such as “Walmart Coupons” — RetailMeNot ranked first in 187 instances when using Google Search. However, this over-reliance on search engines is also a huge risk factor. Google is notorious for penalising Websites that it feels manipulates search ranking algorithms. Rather than competing with RetailMeNot for search rankings, other coupon distributors could look to alternative methods for delivering promo codes to the masses that doesn’t require the cooperation of search engines. (Priceonomics)
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AMERICAN APPAREL’S INSTA-SUCCESS: With nearly 1 million people following its main Instagram account, American Apparel is showing how retailers can leverage social media. The retailer setup regional Instagram accounts that market to a specific region, such as New York City, the UK, and Japan. Each account features local American Apparel employees dressed in the retailer’s clothing. “When employees are featured on our accounts, it causes a lot of excitement and allows them to become more creatively involved in the company. We also have discovered new employee models and photographers through our regional Instagram accounts,” said American Apparel creative director Iris Alonzo. Instagram might not be effective for every retailer, but American Apparel’s bold, colourful aesthetic seems to be a natural pairing for Instagram’s retro-fitted images. (Business Insider)
WAL-MART GETTING SERIOUS ABOUT INDIA: Wal-Mart is opening 50 more wholesale outlets in India, which will bring its total to 70 in India. Wal-Mart doesn’t operate any retail stores in India, but rather sells merchandise to small merchants via its wholesale posts. Many large U.S. retailers have found it difficult to penetrate the country’s $US500 billion retail market, which is dominated by small merchants selling to local consumers. eBay just led a $US134 million investment in Snapdeal, an online marketplace that directly competes with eBay’s own India site, and Amazon only launched an India site in June 2013. (Reuters)
GLOBAL PAYMENTS VIA MOBILE WILL GROW 40% IN 2014: Retailers should gear up for mobile payments, because it’s fast-becoming a popular way for consumers to conduct purchases. Globally, payments transacted with mobile devices will rise 40% in 2014 to $US507 billion, according to a forecast by Juniper Research. It’s important to note that Juniper’s number isn’t just for “contactless payments” made with smartphones in physical stores. It also includes mobile commerce transactions — using your phone to make a purchase on the Amazon app, for example — which accounts for a much larger share of global mobile purchase volume. (Juniper)
French flash-sale retailer Vente-Privee has surpassed 1 million subscribers in the U.S. The company also doubled its U.S. revenue to $US50 million last year, which represented roughly 2% of its global revenue. Vente-Privee began selling in the U.S. in 2011, but it has struggled to compete against Groupon and LivingSocial, both of which have their roots in the U.S. market. (Internet Retailer)
L’Oreal has acquired Chinese skincare brand Magic Holdings, despite pulling its own makeup brand Garnier out of the country. It’s the latest sign that retailers are having difficulty competing against local brands in China. (Fashionista)
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