ASCENT INDEX: e-commerce (May 23 – June 6)

We’ve been keeping a close watch on our enterprise IT terms over the past few weeks, and noticed one standing out high above the others.  While not a new term by any measure, yet still a very important one that continues to see growing activity, “e-commerce” had 28,847 mentions in the two-week period we examined, with an average of 1,800 mentions a day.  This is a measurable increase.

The high number of e-commerce mentions didn’t come as a surprise to us.  It’s a hot topic right now with a lot of chatter around the decline of brick-and-mortar stores and the exponential growth of online and mobile shopping.

The nation’s biggest electronics retailer, BestBuy, closed 50 stores recently, and reported first quarter same-store sales had dropped five percent, even though they haven’t had an equivalent brick-and-mortar since Circuit City’s 2008 bankruptcy.

Industry analysts partly blame Best Buy’s shrinking brick-and-mortar presence, as well as other former retail giants such as Sears, to the phenomenon called “showrooming.”  Customers are walking into retail stores, with smartphones in hand, checking out products in person, then looking them up on their smartphone on sites such as Amazon, sometimes (usually) finding a lower price, and purchasing the item online.

As Matt pointed out last month on peHUB, the decline of bricks and move to clicks trend will continue as more retailers realize the benefits and business necessity of cloud-based transactions. But even local merchants and service businesses need to develop an online presence and distribution strategy to survive. The bottom line is that traditional physical distribution channels are needlessly inefficient and costly.

The e-commerce news sites have been on fire pumping out advice to brick-and-mortar retailers on combating showrooming, and Twitter has been abuzz discussing the various advice and news.  There were a few pieces that stood out: an Internet Retailer article on Samsung and Sony establishing stricter pricing policies in an effort to limit price competition among consumer electronics retailers online and in-store, and a MediaPost piece on how Walmart has released an app made to use in-store that keeps shoppers engaged within their app in-store rather than consulting the popular third party apps such as Amazon.  Here are a few of the influential tweets we saw on the topic:

We’ll certainly be following the brick-and-mortar defense tactics against showrooming, and watching to see if they make a difference and revive in-store sales.