As More Retail Chains Close Their Doors, Others Find New Homes Online

As More Retail Chains Close Their Doors, Others Find New Homes Online
by Jason Selss
Friday, November 14, 2008. 04:21PM

You better spend your Circuit City gift card now before it's worth nothing. That's because the giant chain is one of the latest retailers to fall victim to the spiraling global economic and financial crisis.

Last week, Circuit City announced that due to deteriorating profitability (six quarters in a row of declining sales) they would be cutting thousands of jobs and closing 155, approximately 20 percent, of its underperforming U.S. stores. One week prior, Value City Department Stores LLC also filed for bankruptcy and three retail companies that were already bankrupt, Linens 'n Things Inc., Mervyns LLC, and Shoe Pavilion Inc., decided to liquidate.

Two days after Circuit City Stores, Inc. filed for bankruptcy protection, Best Buy scared investors when they announced bad news - consumers are cutting back on their spending.

Many U.S. retailers are feeling challenged by the consumer spending slump and are worried heading into the holiday sales season. In this turbulent global economy, many more bargain hunters will search the Internet as an alternative to shopping at giant retail chains. Thrifty shoppers are becoming more Web-savvy and are starting to turn to online stores to find big savings. The weakness of the economy will slow holiday sales growth, however online sales during the months of November through December 2008 are projected to grow.

According to the Forrester Research annual holiday forecast, 48 percent of the surveyed consumers said they could find the best values and deals online, compared with 41 percent in 2007. Thirty-six percent of respondents, compared with 22 percent in 2007, indicated they would be more likely to shop online because of higher gas prices. The report also shows that two-thirds of the consumers questioned were planning to spend more or approximately the same amount of money online as they did during last year's holiday season.

For one, online shopping is more convenient and a time saver. eShoppers can simply search the Web for the best bargains and can easily compare prices. They save money on gas and don't need to deal with the hassle of finding a parking space or walking through excess crowds. This gives online businesses a serious advantage over brick and mortar stores during the next two months, and perhaps beyond.

The Forrester Research study also reports that three out of four shoppers prefer to buy from online retailers that offer free shipping, and six in 10 said it is shipping prices that discourage them from buying online. Shoppers should be aware that some online retail sites do not divulge their shipping costs until they reach the checkout center.

A Harris Interactive study confirms that most online users would be more willing to make a purchase if they were offered a discount savings coupon code. And now, each week, more and more coupon code Web sites continue to pop up on the Internet.

Some merchants are reaching out to embrace the flourishing market of budget-conscious consumers by launching online stores. Long Island-based discount home decor wholesaler GoShopUs recently launched GoShopUs.com to offer the online shopping community money-saving deals on premium contemporary home decor products like flokati area rugs and tapestry wall hangings. GoShopUs.com is attracting many new customers to its Web site by offering free next day shipping, with no minimum purchase, and discount coupon codes for additional savings.

Visitors to GoShopUs.com can also sign up to receive e-mail alerts with special promotions and an eNewsletter. While search engine optimization (SEO) and pay-per-click (PPC) marketing plays a large role in driving traffic to the new online retail store, they have also started to create a buzz by promoting themselves on blogs and on social media networks.

This holiday season e-commerce stores all have the same goal - to increase customer base and maximize profits. As the online retail market grows, it's not surprising that the search marketing industry is flourishing. In fact, Advertising Age's Search Marketing Fact Pack 2008 (Nov. 3 supplement) reported that this year search-marketing spending is anticipated to reach $14 billion.

David Meirowitch, founder and president of Remarkable Search, is a seven-year veteran of the online search marketing industry. He has developed accountable and efficient return based strategies for some of the Internet's largest advertisers when he was a vice president at one the sector's top online search marketing agencies. Meirowitch recently launched Remarkable Search, the "first agency dedicated to a hybrid form of search marketing and image distribution."

With just a couple weeks left until Cyber Monday, online merchants are gearing up for a competitive 2008 online holiday shopping season. If they are not doing it already, online retail stores need to integrate search engine marketing and optimization tools and technologies in order to achieve greater search rankings and Web site traffic. Meirowitch recommends the online retail community make the most of the following important online marketing tactics:

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