Shopping’s future: E-commerce action surges again to record levels

Posted Dec. 1, 2009 at 6:58 a.m.

Shopping’s future: E-commerce action surges again to record levels

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Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of WRAL.com.

MORRISVILLE, N.C. – Even with e-commerce records falling on “Black Friday” and, most likely on “Cyber Monday” as well, the world has only just begun to experience how online shopping is reshaping retailing.

So says Scot Wingo, chief executive officer at ChannelAdvisor who works with global sellers of electronics, toys and the hottest item for 2009 – Zhu Zhu pets.

“There is still quite a bit of room for growth in e-commerce,” Wingo told Local Tech Wire and WRAL.com as Cyber Monday sales kept rolling in. “Right now, online retail only accounts for 3 to 4 percent of retail sales, so we see tremendous opportunity for continued growth.”

Wingo certainly didn’t expect the onslaught of sales the e-commerce services provider experienced on Friday and on through Monday.

“Gross merchandise value [GMV] did exceed expectations,” he said. “Given the recession, we’d expected things to be flat this year, so growth is definitely a positive.” GMV refers to the amount of sales ChannelAdvisor helped handle.

Privately held and venture capital-backed ChannelAdvisor provides a series of software tools and services to help companies such as eBay and Amazon fulfill orders. The more sales the better for the company, which according to Wingo receives approximately 1 percent of each transaction it helps process.

Online sales for ChannelAdvisor clients surged 7.8 percent on Black Friday to $17.2 million. That GMV total broke the record of $15 million set a year ago.

Especially hot were “comparison shopping” Web sites that help customers compare and buy products. The action at Shopzilla, Pricegrabber, TexTag and others surged 35 percent.

eBay, Amazon and Buy.com, meanwhile, made 12 percent gains in transactions supported by ChannelAdvisor’s Marketplace product.

Late Monday, as sales continue to roll in, ChannelAdvisor noted that “most of our retailers are performing at or above the level they were last year,” a spokesperson said.

Wingo got a special kick out of the Zhu Zhu pet sales, which he predicted back in October would be a big hit based on his review of sales trends.

“We’re still compiling data,” he said of the Cyber Monday deluge. “Our client eBags has done exceptionally well, showing 62 percent growth by 10 a.m.

“Toys have been a hot item – the hottest toys were the Zhu Zhu pets as predicted in [my] blog, and the Mindflex.

“Electronics are selling well as are all things iPod and LCD TVs.”

However, one sector in e-commerce is struggling as ChannelAdvisor statistics showed – online auctions. For example, while eBay fix sale prices grew, auctions dropped.

“Auctions have been declining steadily, with fixed-price sales increasing,” Wingo said. “This has been a steady trend as the popularity of auctions has diminished. Consumers don’t want to wait for the auction to run up to get their product. They want it now.”

Retailers are looking to build momentum for online sales through the rest of the holidays, too, Wingo added.

“We’re anticipating continued momentum,” he said. “Black Friday and Cyber Monday are usually a harbinger for the rest of the shopping season. With so many retailers offering free shipping, next-day shipping and even same-day shipping this year, we’re anticipating that online sales will continue to be impressive this holiday season.”

Changes in brick-and-mortar inventories are also helping drive more shoppers online, Wingo added.

“Considering the percent of sales that are occurring online vs. the total number of sales, we’re seeing this year as part of a gradual movement of sales online from offline,” he explained. “The decreased inventory of offline retailers is helping this trend.

“Many retailers were burned with extra inventory last year, so they’ve been particularly vocal about limiting inventories this year, which will drive more folks online in their hunt to find products.”

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Tags: ChannelAdvisor, Opinion Analysis

The Skinny

WRAL Local Tech Wire Publisher and Editor Rick Smith dishes out tidbits from the local technology sector. Read more articles…

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