I have a feeling that some of the blank faces I was seeing in my audience at Shop.org last September when I mentioned the unthinkable ‘R’ word have finally seen the light. If $100/barrel oil translating to $4/gallon gasoline hasn’t provided the wake up call, then I have a feeling the changing face of offline retailing has. Truth is that gas and food (prices also rising) come first, which means that clothing and furniture merchants are not having the best days.

As the NYTimes points out, “Retailing Chains Caught in a Wave of Bankruptcies.”

The article lists the following retailers in financial distress, closing stores, or scaling back operations:
Levitz (filed for bankruptcy protection)
The Sharper Image (filed for bankruptcy protection)
Linens ‘n Things (possibly filing for bankruptcy protection soon)
Foot Locker (closing 140 stores)
Ann Taylor (closing 117 stores)
Zales (closing 100 stores)
Domain (filed for bankruptcy protection)
Wickes (filed for bankruptcy protection)
Fortunoff (filed for bankruptcy protection)
Harvey Electronics (filed for bankruptcy protection)
Lillian Vernon (filed for bankruptcy protection)
Bombay (filed for bankruptcy protection)
J.C. Penney (scaling back or delaying expansion)
Lowe’s (scaling back or delaying expansion)
Office Depot (scaling back or delaying expansion)
Lane Bryant/Fashion Bug (closing 150 stores)
Wilsons the Leather Experts (closing 158 stores)
Pacific Sunwear (shutting down Demo - 153 stores)

Citigroup’s #1 takaway from ChannelAdvisor’s Catalyst Conference point to continued rosy times for online retailing (read full report):

ChannelAdvisor clients not yet seeing macro-economic slowdown
– Biggest surprise to us was the general consensus among the retailers we spoke with that they were not seeing much impact from macro-economic headwinds (…yet?). Consumer spending remains strong in many categories and sellers were confident that their multi-channel strategies can continue to fuel growth.

But I think Mark Mahaney’s comment that the majority of the sellers at the conference are just now expanding beyond eBay explains a lot of this optimism:

Key item to remember here is that most of the retailers who are clients of ChannelAdvisor are primarily eBay sellers and many of them are only just now expanding beyond eBay into other marketplaces (i.e. AMZN or Overstock), comparison shopping, and in early stages of search engine marketing.

Understand that I’m not predicting all doom and gloom regarding online sales. Growth in online sales will still handily beat growth in offline sales. I’m just not expecting the rosy predictions of 17% growth (Forrester) to come in anywhere near on target. There will be plenty of merchants that buck the trend, particularly the savviest online marketers using analytics and expanding to new online marketing channels.

More on our fragile economy soon…

New Blog
It’s always great to see merchants blogging about their internet marketing experiences. I’ve mentioned Preston Wily’s blog before, and I’d like to introduce you to John Middleton’s blog, which has been added to the ComparisonEngines.com Blogroll. John doesn’t list an ‘about us’ section on his site, so I’ll leave it up to him to decide if he wants to share his bio/company information (John, you can post a comment below), but his tag line states: ‘Read as John learns about what it means to be a web analyst for a small company in Portland, Oregon.’ John has been focusing on the shopping engines, but I’m sure there’s more to come.

New Google Base Resource
Tom the Developer, a frequent contributor to the Google Base Help Discussion Group, has launched a great little app using the Google Base API. The competitor analysis tool allows you to see the attributes being submitted for each listing. GREAT resource for anyone doing Google Product Search focused data feed optimization (DFO) (yes, that’s a link to SingleFeed b/c that’s what we do!).

Well, there’s some debate about when the first transaction actually took place as well as the actual definition of ecommerce, but the article by The E-Commerce Times gives a nice look back at a potential first online sale, an IBM PC for $7,000, which took place on March 4, 1983.

13 years ago, I worked at CUC International (later Cendant, and no, I wasn’t involved with the accounting scandal). I thought CUC acquired the first real ecommerce site on the web when they acquired a company called NetMarket which was run by Roger Lee.

Anyways, ecommerce is now a $200BB industry which will grow to $300BB in three years, according to Forrester.

While I’ll try to do a comparison when I have everyone’s numbers, I want to start sharing the data I do have:

-comScore reported that “shoppers spent 21 percent more online this Cyber Monday, November 26, than they did last year.”
-U.S. online shoppers spent a record $733 million in a single day on Cyber Monday, according to market research firm ComScore.

According to PriceGrabber President Ron LaPierre…
-Referrals to merchants for Nov. 22 - Nov. 24 were up 45% year over year.
-The Nintendo Wii was the top product all holiday weekend and was still the top product as of about noon on Cyber Monday (Nov. 26). While the Wii was out of stock at a lot of retailers, there were always at least 17 Storefronts willing to sell the console at a premium.
-The Microsoft Zune was the #2 product all weekend. On Pricegrabber, Microscoft’s share of the MP3 category has gone from 5.4% at end of October to 13.5% month-to-date through Nov. 21. The most popular iPod has only been as high as the #12 product.
-This is definitely the year of the GPS. 3 of the top 15 products are GPS units.
-The top 5 product categories were unchanged from last year: Electronics, Computers, Home & Garden, Cameras, and Clothing (in that order).
-Toys are still popular as a channel - moving between the #3 and #6 spot - but the China scare is playing a big role in unpredictability.
-Women’s handbags and shoes have been the biggest non-tech products.
-Ron predicts that the next 2 Mondays will be big shopping days and that there will be a fairly noticeable decline back to pre-Thanksgiving levels after Friday, December 14th.

According to eBay’s press release…
-”Shopping.com’s traffic to its merchants on Cyber Monday 2007 increased 28 percent compared to last year as more shoppers sought out the comparison shopping site to find some of the best online deals. Traffic to merchants for the Thanksgiving holiday weekend, Black Friday through Cyber Monday, was also up 30 percent year-over-year. ”
-”“We’re pleased with the early spike in online shopping, but are looking forward to the second Monday in December, or what we’ve begun to call ‘Green Monday,’ when we expect online shopping to really peak this season,” said CEO of Shopping.com Josh Silverman. “Green Monday outpaced Cyber Monday in the past few years in terms of revenue and consumer traffic on our site. More shoppers are comfortable doing the bulk of their online shopping later in the season, and after surveying our merchants, we found that a whopping 72 percent are offering next day shipping this year as a response to demand to shop later.””

According to Yahoo! Shopping PR…
-Transformers Bumblebee overtook the Nintendo Wii as the top product for the Holiday Shopping weekend (Nov. 24 - Nov 25) – the first time the Wii has been displaced since June when the iPhone launched. After Bumblebee and the Wii comes Apple iPhone 8GB, Sharp Aquos LC-46D62U, and the Nintendo DS Lite Onyx.
-50% year over year traffic growth for Thanksgiving and Black Friday.
-Compared to the month of November 2006, page view traffic is up 37% for the 2007 Holiday season (This is based on comparing November 2 to 18, 2006 and November 1 to 17, 2007)
-Clicks are up 13% compared to last year (This is based on comparing November 2 to 18, 2006 and November 1 to 17, 2007).
-Top categories for the weekend: Apparel, Electronics, Home and Garden, Toys, Hobbies, and Collectibles, Computers and Software, Video Games, Jewelry, Sports and Outdoors (in that order)
-Green products may not be the big winners this year. The Yahoo! survey found that most holiday shoppers are not swayed by a product’s green status when shopping for holiday gifts. In fact, 63 percent of holiday shoppers are equally as likely to purchase a gift that is labeled green as one that is not.
-More than 1 in 4 holiday shoppers (27%) say their holiday spending budgets will be less this year as compared to last year. Additionally, 89% of holiday shoppers actively seek bargains or sales when holiday shopping.

Update: Checkout this post by Rich Riley, SVP Yahoo! regarding the outage…and then read the strongly worded comments.

As everyone and their grandmother reported, Yahoo! Merchant Solutions experienced outages on Cyber Monday, potentially losing its merchants boatloads of $$$$.

The official response from Yahoo!:

We are aware that Merchant Solutions was experiencing some problems today [Monday] due to heavy holiday traffic on Yahoo! powered merchant stores. We are aware of the issues and are working towards a solution as quickly as possible. Yahoo! makes every effort to prevent outages. We continue to put strategies in place that will minimize the impact that extremely heavy traffic periods have on our merchants. Yahoo!’s relationship with our merchants is extremely important to us and we value their loyalty. We apologize for any inconvenience this may have caused and we are continuing to put processes in place to prevent further disruptions.

Yahoo! Merchant Solutions (formerly known at Yahoo! Stores) is probably the largest ecommerce provider with somewhere between 40k - 50k storefronts. While Cyber Monday is not the busiest shopping day of the year, it’s close. This is obviously completely inexcusable.

Sure, there are a ton of other solutions - Homestead (ProStores), osCommerce, Infopia, Cart32, etc. - but while merchants will groan and complain, the thing is that changing ecommerce providers can be a pain in the ass. Assuming that Yahoo! takes care of its merchants the rest of the holiday shopping season, I’m not sure there will be much of an exodus to other ecommerce providers.

Talked with Rob Solomon, General Manager and Vice President of Yahoo! Shopping, for a quick holiday shopping update…

On Traffic…
“On Thursday, we saw year over year traffic growth of 63% and on Friday we saw growth of 52%. We were expecting growth in the 20-30% range.”

On Hot Products…
“Xbox 360 is an incredibly popular search term, but no one has it. You can buy it at auction for 2-4x list price [Maybe Yahoo! Shopping should put a link up to Yahoo! Auctions on that search results page] iPod nanos, and the iPod itself. Digital cameras. Also, shoes are very popular, with Puma as a stand out brand, rising to the top 20.

On Popular Toys…
-Roboraptor – a robotic dinosaur, this year’s Robosapien
-Darth vader voice changing mask
-The Star Wars Mr. Potato Head Dolls - Darth Tater and Spud Trooper
-Leapfrog products
-‘Shout’ Dancing Elmo
-Bratz dolls.

On the Shoposphere…
“When we launched, there were a lot of great lists created across different themes. Now, a lot of holiday thematic lists are being created; top holiday movie lists, toy lists, wish lists, things people lust after, things people want. We had theorized that themes would be important - the holiday season, Valentine’s day, etc., and people seem to be tapping into [that idea]. We’re really pleased with how it’s taken off. It’s exceeding expectations and being viewed in bigger numbers than expected.”

“We also hoped it would tap into the long tail of products as we now have 100m products on Yahoo! Shopping, and if you look into the lists you will see a good assortment of products that you never would know existed. As people consume and syndicate their lists, it will help with retention and it will spread the word [about the offerings on Yahoo! Shopping]. The reason we created the Shoposphere was to take our notion of Yahoo! Shopping and extend it anywhere. This is a big part of our strategy.”

“Pick lists are definitely a twist on traditional reviews as reviews used to be a one to one thing. [The Shoposphere] is the next generation of how people are reviewing products. It’s turning into a blog meets review platform. We think this is one of the products that will kick off a very rapid phase of innovation from big players in Q1.”

More Yahoo! Shopping Stories:
Comparison Shopping - Important Holiday Season Happenings - November 26, 2005
The Shoposphere - A Closer Look at the New Yahoo! Shopping - November 15, 2005
Integration of Shopping Coupons - October 14, 2005
Interview with Chris Saito (Yahoo! Shopping) on the launch of Yahoo! Shopping Web Services - August 4, 2005
Interview with Rob Solomon, GM & VP Yahoo! Shopping - July 18, 2005