October 10, 2012
Each year, merchants gear up for the holiday season. For many, this is a make-or-break time, a time that really dictates the outcome of the entire year.
Shift in consumer buying behavior
Brands are seeing a shift in the behavior of buyers: More and more buyers are buying online. According to Deloitte, non-store holiday sales will increase by 15% over 2011, with 75% of those sales happening online. In addition, eMarketer predicts that US online shoppers will spend a combined $54.47 billion this holiday season, or about $287 each.
There are generally two types of online merchants: Those who sell their own products and those who sell the goods of other brands. The strategy for those who sell their own product is to win on product design and branding while those who sell the goods of other brands primarily win on price, ease of platform use, and product selection.
A new breed
The recent ubiquity of plug-and-play online shopping carts like Magento and Volusion in addition to “traditional” stalwarts like eBay and Amazon have made it more easy than ever to create your own online store. For the first time ever, merchants can really solidify their brand online without hiring a team of web designers and developers. And with more and more tools designed to help online merchants, ecommerce businesses have more options when deciding what to do in-house.
Choosing the right partners
How do you know when do manage something in-house and when it makes sense to partner with another company? Constraint optimization. In layman’s terms, you’ve got to make the most out of what you’ve got.
Boris Wertz recently wrote a piece on TechCrunch that highlighted the importance of vertical integration for brands who are strictly online.
Key takeaways from the article:
- Product differentiation is paramount to brand success
- Verticalization is great in areas where competitive advantage exists, but practices where scale is important like manufacturing and logistics are best done with partners
Regardless of whether you’re an online consumer, seller, or both, the holidays can be a great time for everyone. Just make sure your online experience isn’t a lump of coal. Happy ecommercing.