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The Internet is changing retailing says Jim Nolan
01 Sep 2005
The findings were published in The State of Retailing Online 8.0 , an annual report published by shop. org in conjunction with Forrester Research. The numbers that caught my eye said "in 2004 online accounted for 6.5% of total retail sales, up from 5.4% in 2003. In 2005, online sales are expected to account for 7.7% of total retail sales. Every category tracked in the study experienced growth. Health and beauty increased 58%.
Sporting goods shot up 43%."
That 7.7% of total retail sales would suggest that our industry would be actively taking part in this fast moving trend. The NMMA estimates that new boat and motor sales of $13.6bn were made in 2004 and that aftermarket accessory sales were an additional $2.4bn.
"Should be" might be a better use of words because there is no real evidence that it is.
Sure, there are some companies involved in online retailing, but they are nowhere close to 7.7% of new boat, motor and aftermarket accessory sales.
Aftermarket accessories are clear candidates for online sales, yet West Marine (375 stores in 2004 and total sales $683m) said in April 2005 "we are launching a number of initiatives designed to improve inventory turnover, increase comparable store sales and strengthen our operations".
One of the "bold initiatives" they quoted "is to expand our efforts to build sales through the Internet channel", a phrase which suggests a lack of urgency.
Online retailing is assuredly going to alter the structure of our industry because of its impact on profit margin.
Those companies that embrace it and get it right will be the winners.
What happens to those who do not I will leave to your imagination.
