As companies are already preparing for the 2014 holiday sales period, the eCommerce news and analysis is increasingly positive. The final reports coming out concerning the 2013 season make it evident the online shopping market continues to attract an increasing percentage of total holiday sales.
As consumers move in larger numbers to the Internet as a preferred source for shopping, the market space is becoming even more competitive. Amazon continues to set the pace for current eCommerce trends, with its Prime program setting a high bar for smaller players. Customers increasingly demand free shipping and prompt delivery for any orders, large or small.
As the industry responds to these market expectations, many 3PL companies are making major investments in new distribution centers and automated warehouses. Increasingly, smaller players are finding it more practical to outsource their order processing and other logistics requirements to higher-volume companies. The economies of scale these firms enjoy are a major factor in the continued decline in unit shipping costs within the industry.
These factors are also heavily influencing the eCommerce strategies of the traditional retailers as they watch their share of the market continue to erode.
In this space, even giant player Walmart is testing numerous strategies, from local store pickup of items ordered online to using the post office for delivery services. With billions of dollars of sales and profits in play, these mainline retailers continue to struggle to find the right marketing and support mix to protect both market share and profitability.
All players in the industry are focused on the changes needed in planning for the 2014 season. Aside from this year presenting a shorter selling season, the companies know they must meet the new, higher standards for customer service and product selection. At the same time, mass retailers are grappling with the continued segmentation of the online offerings, with specialty companies offering broad selections in narrow niches.
This strategy is designed to exploit the weakness of a physical retailer who, limited by total counter space, normally offers a broad selection of categories with limited choices within each product area.
While much of the current transformation of the retail market was unforeseen when eCommerce really got started early last decade, it is now the focus of the best minds in the retail industry. As the market continues to evolve, even more investment will be necessary to meet those increasingly high consumer expectations.
