This week in eCommerce news, China’s eCommerce industry is expected to hit $1 trillion by 2019 according to reports by Forrester’s. UPS is adding a surcharge to residential orders following a disappointing holiday sale season and hard to predict online consumer shopping habits. Macy’s acquired Bluemercury, a spa and beauty chain with 60 locations and growing eCommerce presence. A $6.3 billion deal was made this week between Staples and Office Depot, creating a company that will have sales that total $39 billion, and web sales of $14 billion. This Superbowl was the most social yet, with more consumers hitting-up networks like Facebook and Twitter during the big game. Advertisers made attempts at targeting shoppers with highly sought-after commercial slots and social media activations, some were success and others…not so much. For all the details from this week’s eCommerce newsmakers read-on below!
Superbowl Sunday, Super Social
Source: Internet Retailer
This past Sunday’s Superbowl was the most social yet, with advertisers and consumers taking to various networks to discuss the day’s events, which includes not only a showcase of men passing the pigskin but corporations pushing products as well. The mass amount of users that hit-up networks like Facebook (65 million) and Twitter (28.4 million) gave advertisers a great opportunity to target more shoppers. Although these numbers are up from last year, analysts are saying the numbers could have been higher had the commercials featured a higher number of, and more impactful Calls To Action. Some companies did succeed in having their brand trend on social media following a commercial spot during the big game, like Always’ “#LikeAGirl” messaging. Nationwide, however, was a less than successful; the company generated 238,000 social mentions, 88% of which were negative.
eCommerce’s $1 Trillion Outlook
New outlooks released by research firm Forrester’s this week report that China’s eCommerce spending will hit $1 trillion by 2019. Once an emerging market, China’s growth is being propelled forward by the embrace of new and better mobile apps, as well as improved logistics allowing retailers to reach consumers in remote locations. China became the world’s eCommerce leader two years ago in 2013, when online sales for the year totalled $307 billion. Mobile sales on China’s top eCommerce sites have been growing steadily at a rate that surpasses that of the U.S. Strong investments in mCommerce set’s China’s online strategies apart from that of its counterparts. The country’s logistics have significant improvement after a $16.3 billion investment into Cainiao, a smart logistics network that will get packages to any address in China within 24 hours. I think its safe to say China understands the economic impact of eCommerce, and is doing everything to leverage and elevate the industry.
eCommerce Hard to Forecast
Following the biggest shopping season of the year, UPS announced that due to hard to predict shopping habits and a poor holiday season it will change up its operations to better react to short-term forecasts. The company will also be applying a surcharge to residential addresses. Although we saw some spikes, sales dipped more than predicted over the season, resulting in higher costs for delivery company. UPS states that it costs about three times as much to deliver to a residential address as it does a business, hence the new surcharge they’re imposing. 2013 was an even poorer year for UPS; according ShipMatrix Inc, 1.3 million packages were left undelivered on Christmas Eve. For 2014 UPS’ CEO wanted to protect the brand, following the disastrous 2013. The surcharges planned by UPS will make it harder for eCommerce retailers to offer customers free-shipping.
A Beautiful Acquisition for Macy’s
Source: New York Times
Macy’s announced this week that it will acquire Bluemercury a beauty and spa chain that that launched in 1999, now with 60 stores in 18 states and growing eCommerce operations. This deal not only expands the Macy’s customer base, of which cosmetics and beauty related products are a big draw, but also brings to the retailer a booming eCommerce business. The executives at Macy’s are looking forward to expanding their product offering, reaching new customers, and applying their expertise in omnichannel to bring a seamless experience to customers across mobile, online, and stores. BlueMercury also offers spa services, however Macy’s is still unsure as to what – if any – services it will be offering in store. Look forward to Macy’s Q4 and full year 2014 earnings report on February 24.
The Multi-billion Dollar Web Merchant
Source: Internet Retailer
A 6.3 billion dollar deal was announced this week between Staples and Office Depot. Staples, which ranks 3rd overall on the Internet Retailer 2014 Top 500 Guide, will acquire all remaining shares of Office Depot for a price of $11 per share. It’s estimated that this deal will create a company with sales that total $39 billion, with web sales totalling $14.2 billion. Staples recently is going against strong competition online, and hope this deal will accelerate their opportunities with eCommerce. The company is currently selling over a million SKUs online, and will now be able to expand their product assortment with the acquisition of Office Depot and its customer base. In 1997 Staples originally tried to purchase Office Depot, but the Federal Trade Commission quickly put a stop to it. Staples in recent years innovated to stay competitive in the world of eCommerce, in December of 2014 launched Staples Exchange that lets supplies offer their products on Staples.com and drop-ship to customers in an attempt to compete against Amazon.