Analyst firms such as Forrester and Comscore are predicting big increases in “Black Friday” and “Cyber Monday” online shopping this weekend. They are not alone.
, the Morrisville-based company that provides much of the ecommerce infrastructure for such companies as eBay and Amazon.com, also is expecting an onslaught of online bargain shoppers.
The company, founded and led by Chief Executive Officer Scot Wingo, recently beefed up its management team and resources as part of its efforts to prepare what Wingo believes will be a record-setting weekend.
He is excited about the coming shopping spree, through which ChannelAdvisor makes its money in fees for helping manage transactions, despite the still-sluggish economy.
“Unfortunately the economic backdrop has not improved since last year. Consumers are on a budget and retailers are working hard to get their limited funds,” Wingo said. “We anticipate that there will be strong sales, discounts and promotions on Black Friday and Cyber Monday that pull the holiday [shoppers] in, and we expect those days to see substantial growth versus last year.”
ChannelAdvisor reported record transactions in 2009.
This year, in ecommerce sales from a year ago to just more than $9 billion for the weekend
of more than $1.7 billion. For November and December, Forrester projects online sales of $50 billion.
Since ChannelAdvisor works with many retailers on managing inventories and pricing, Wingo can a true insider’s view of what’s happening.
Are online sellers offering more and/or bigger discounts this year due to the state of the economy?
We’re seeing earlier discounts to capture shoppers limited budgets, but overall discounts are equivalent to last year. It does seem less concentrated. Everyone had door-buster on Black Friday last year, but this year even Walmart is having an open house starting at midnight with periodic discount announcements.
If so, how are they cutting costs to sell at a profit?
Retailers are partnering with manufacturers to drive the most value possible and pass back the cost of discounting.
Forrester is projecting big increase over last year, which was up from 2008 despite the recession. Do you and your customers share that optimism?
Yes. As early as September we were forecasting fourth-quarter ecommerce growth in the high teens. Comscore has been more conservative, so it’s good to Forrester’s forecasts in line with what we’re seeing. Generally our customers outperform the ecommerce industry, and we like to think that we have something to do with that!
Forrester cites big increase in buying from repeat shoppers (47 percent) – What’s your view?
We agree with this premise because retailers are increasingly sophisticated about driving repeat business through targeted email marketing and promotions to repeat customers and loyal fans on social media channels. Retailers are often offering their best prices to their repeat customers.
Are people becoming more comfortable with shopping online despite all the concern about identity theft?
Yes. Consumers feel more secure through a variety of offerings such as the industry standard of PCI and alternative payment systems like PayPal that allow consumers to hide their payment information so they don’t have to give it out repeatedly.
What are key factors driving more online buying?
Online retail offers more selection, convenience, better value—all factors that are encouraging consumers to venture online. The recession has also boosted sales for online retail as there are fewer big box retailers with the bankruptcy of stores like Linens and Things and Blockbuster.
What particular segments are hot, and why?
Consumer electronics is leading the way with strong demand for apparel/fashion, home and garden as well. Also strong growth in the auto parts category as consumers fix up their cars instead of buying new cars.
Do you see any drops in some categories, and if so what do you believe is happening?
Media and video games, with the exception of some of the motion controllers, since there are no new consoles this year, and those are usually big drivers for sales.
How does ChannelAdvisor gear up for the big push?
Throughout the third quarter, we deployed new hardware which gives us more than enough headroom for the holiday traffic rush that we see.
Your new management team is in place, have they helped you shape 2010 planning?
It’s always good to have new perspectives and a fresh set of eyes. We work in a target-rich environment; this new team has helped ChannelAdvisor determine its highest priorities.
What’s your hot pick as the gift of the year?
For the younger kids, you can’t go wrong with Squinkies and Zoobles. For older kids, Paper Jamz are the way to go.
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