Monday, November 27, 2017

A Boomerang Commerce analysis shows retail chains struggling to compete with Amazon on price, but smaller niche sites experience a sales surge.

Giants like Amazon.com Inc. and big retail chains selling online traditionally gobble up a big piece of the Thanksgiving weekend sales pie, but smaller online-only merchants say they’re doing just fine with the scraps.
E-retailers that offer unique products that can’t be found on other sites are seeing explosions in holiday sales growth while larger niche retail chains are struggling to compete in the era of Amazon. Specialty retail chains “will suffer this season and beyond,” according to an analysis conducted by Boomerang Commerce, a technology company for retailers and brands.
Merchants like Sur La Table, No. 245 in the Internet Retailer 2017 Top 500, and Toys R Us (No. 38) have done damage to their brands by spotlighting items online that are cheaper on Amazon (No. 1), according to Boomerang. A Nespresso coffee machine featured on SurLaTable.com’s first page of deals was priced at $173.96, 29.4% higher than the $122.84 price on Amazon. Of 18 such products available on Amazon, 10 were less expensive than Sur LaTable’s prices.
Toys R Us has had the same problem. Boomerang found 14 items that overlap with Amazon’s inventory, and 11 of those were cheaper on Amazon—including an art desk and chair that ToysRUs.com offered for $84.99, which Amazon beat with a price of $64.99.
Representatives with Sur La Table and Toys R Us could not be reached for comment.
“Specialty [retail chains] are still getting e-commerce dead wrong, thinking that consumer price perception doesn’t matter,” says Gary Liu, Boomerang’s vice president of marketing. “You can’t differentiate from Amazon based on your store experience and staff knowledge when consumers price-compare online to decide if they even want to come into your stores. Online is where the customer journey starts and where customer perceptions get solidified, and this has a domino effect through the lifetime of that customer’s buying behavior.”
But a number of online-only retailers have bypassed that headache entirely—opting to offer items Amazon can’t get its hands on and not waging a price war they can’t win. And they are seeing some substantial perks.
Betabrand Inc., No. 585 in the Internet Retailer 2017 Top 1000 and an online-only apparel retailer that crowdfunds its designs, is having a “really strong” holiday season, chief marketing officer Aaron Magness said Sunday. Customers started shopping earlier last week instead of waiting for Black Friday, he says and roughly 60% of the merchant’s revenue came from mobile, and the mobile conversion rate is up about 21% year over year.
Gentleman’s Box, a subscription retailer that sells boxes of curated men’s fashion and lifestyle accessories, benefited from mobile shopping surges too. Black Friday traffic from mobile devices increased more than 50% this year with mobile sales soaring by more than 300%, according to Paul Chambers, co-founder and chief marketing officer. Overall, Gentleman’s Box has nearly doubled its Black Friday sales from last year, and the holiday conversion rate has been above 3.5%.
More customers also are opting for a premium subscription box, which has a higher price point. “We believe this may be performing well as buying power is stronger this year, and there is increased economic confidence,” Chambers says. “We are extremely pleased with our sales this weekend.”
Gentleman’s Box also saw an unexpected uptick in shoppers in the 45-54 age bracket, with this group growing by 71%, Chambers says.

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