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December trading online up 42% for Pindar clients
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Niche online retailers have enjoyed an average sales increase of 42.2% in December 2007 trading, based upon the sales data of over 50 niche retail and mail order companies whose online shops (websites) are managed by e-commerce services provider Pindar Graphics. The same companies exhibited a growth figure of 27% for November 2007. 20% of the companies analysed doubled their sales.
Overall internet visitors in December increased by 40%, which implies that these retailers are executing better than 2006 in terms of website conversions (the ratio of orders to visitors).
Clothing and accessories companies performed especially well, boasting an average increase of 70%. There are 23 businesses in the sample. Home and garden retailers (12 companies) showed growth of 40%. Interestingly, companies broadly in the gifting sector reported lower growth of 11.4% on average, although the more recognisable brands in this group came in at closer to 30%.
10 businesses in the sample doubled their December sales from 2006 and 7 of these were clothing and accessories retailers. This included Craghoppers, Harrod Horticultural, Soletrader, Tabitha and Wallace Sacks.
Pindar’s analysis is that these successful companies have evolved in terms of online retailing savvy, execution and analysis, using multi-channel marketing techniques well combined with attention to detail on website usability. Marketing strategies that have proved most effective include email campaigns, paid search and catalogue mailings. Factors that influence conversion include website layout and navigation, ease of browsing and purchasing, clear delivery and shopping information, effective product presentation and clean, secure technical performance.
However, 13 of the group experienced negative growth. Of these, 5 have been involved with significant business re-organisations and of the rest, only 2 had sales in excess of £100,000 in December 2007.
Overall, Pindar Graphics e-commerce clients transacted close to £10m of business online from over 4m visitors.
Commented Roger Willcocks of Pindar Graphics: “Whilst many high street retailers have reported a fall in sales over the Christmas period, Christmas has certainly been good to those who have worked at it. Niche businesses with good products backed by successful execution have prospered online and we’re very pleased to be working with clients have out-performed the market.”
Opinion
Retail makes for grim reading and everybody wants to talk about e-commerce. And those who’ve got e-commerce want their online shop to be their second best performer or their saviour. Wholesalers are selling direct and retailers are selling via catalogues. And we’re all using Facebook which is the fifth largest provider of traffic to retail sites.
So, what’s the plan for retailers when high street is growing at less than 1%? Our analysis – gleaned from over 50 niche retailers – is that one average December sales were up 42%: apparel did even better at 70% and one fifth of those analysed doubled their sales.
Cannibalisation? Yes, in part. Trade shifts online because it’s more convenient and in the Internet’s long tail there’s theoretically more choice – it’s difficult to go niche on the high street. But these niche retailers are growing at the expense of the high street, stealing its trade. And largely, it’s a case of better execution.
These niche retailers have evolved in terms of online retailing savvy, execution and analysis, using multi-channel marketing techniques combined with attention to detail on website mechanics. They think a lot about doing optimising their sites for Google, they use paid search and affiliates. They are even using catalogues to acquire new customers which they send to their websites and follow up with targeted promotions via email campaigns to in-house databases. Catalogue browsing precedes nearly half of all web purchases for certain products and catalogues represent a compelling source of new custom as opposed to say, opening another shop.
Their websites convert well. They have proven navigation and layout, great photography, compelling copy, calls to action and promotions, clear delivery and shopping information, and they’ve thought about the nitty gritty of transacting and fulfilment and clean, secure technical performance and they measure and analyse everything.– just like mail order businesses. In fact, they are becoming mail order businesses as we know and love them. Talented direct marketers, selling and fulfilling products without face-to-face customer contact. That is not retail as we know it – and therein lies the rub. To maintain their share of consumer spend, retailers need to think and act like direct marketers in the internet age.
Christmas has certainly been good to those who have worked at it. Niche businesses with good products backed by successful execution have prospered online.
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