As More Retail Chains Close Their Doors, Others Find New Homes
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
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:
- Inclusion and shopping feeds - At a market rate cost-per-click you
can ensure your entire product catalog is represented on portals and
search engines such as Yahoo, Nextag, Bizrate and Shopping.com.
- Social networking - If you take the time to make your site a
resource for the consumer you will create a more enjoyable and
repeatable experience. Utilizing social mediums like Facebook, MySpace,
YouTube and other destinations give your business flair, while giving
you multiple opportunities to gain customers and mind share.
- Product specific landing pages - Take your volume drivers or high
margin items and design a focused landing page. Using a content-based
SEO strategy and PPC marketing you can devise a targeted program
removing layers from the process.
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