Before you read any further in this blog, take a guess at what the answer is to the question below…
What percentage of total U.S. retail sales takes place on the Internet?
While you are figuring out that number, I will share with you some observations.
I remember attending a marketing conference and listening to a young lady from one of the large New York ad agencies talk about the work she does with a large Consumer Package Goods (CPG) client.
Her specialty is online and social media marketing. She was the VP of a group of more than two-dozen folks at the ad agency.
She talked about the great targeting message strategy she developed based on both content and online behavior of the CPG online consumers.
Her team was proud of the “very cool” predictive models they built.
I asked how those models could then translate to more conventional marketing and promotional sales programs.
She smiled and said, “well, not much… they are based on detailed online behaviors and are constantly being updated and remodeled.”
She went on and said… “And conventional media channeling is really useless for marketers because soon everything will be done online.”
Those attending the marketing conference very quickly shook their heads in confirming agreement.
I then asked her, “How many customers are in your online audience base?”
She put up a slide and said, “just over 22,000.”
“Wow” was my reply.
I remembered how a fast food franchise had just told me the day before that they rejected a retail site because it only was drawing a daytime working base of 40,000 folks vs. another one that was drawing in double the number.
I preach a bunch about rifle-targeting in the blog posts and often harp on how media folks are programmed around “the bigger the reach – no matter who is being reached – the better the media option.”
The answer to the question that I posted in the second line of this blog post?
Here is the quote from the article in this week’s WSJ article…
“Online purchases account for just 5.8% of total U.S. retail sales in the second quarter of 2013, up from 5.1% a year earlier.”
Wow. That’s phenomenal growth!
The reason why I took time out to write this blog is that there is an overwhelming belief among some of the most educated and trend sportscasters that the web is dominating everything, everyone, every where.
Social media and website marketing dominate the seminar subject agendas.
The 20-something Millennials streaming into the ad agencies believe that newspapers are just rotting on the vine and that everyone gets their news onine.
Retail store marketing? Well shoot, that’s easy, get cracking on your Facebook storefront.
Even the by-products of the incest ad agency mega-mergers, the Madison Avenue Ayatollah preach that it’s the web firms that are the money makers and that conventional media buying can be automated online.
All for that 5.8% of the retail revenue sales volume and those 22,000 CPG consumers!
I guess that other 94.2% of sales must be dwelling in the Stone Age!
Maybe its because I am a Baby Boomer that I did not rule out the day that the travel agencies would be back.
Or that the retail store fronts still had a place and a role that probably would become even more important as the Millennials enter the home ownership phase.
Or that those community newspapers were not likely to fade away.
Maybe the most fascinating part of the WSJ article covering these new statistics is the significant amount of the article dedicated to sharing just how difficult it is to secure online sales figures.
Just as it cites in the article, reporters would call the online sales divisions and they would either (a) change the topic and show the reporters some new website tools… (b) play stupid and say that they did not track that information in their department … or (c) talk about how difficult it is to measure online sales.
Reminds me of my niece with the chocolate covered hands and when I ask if she got into the candy jar and she replies… “I don’t know.”
Board members and shareholders are not smiling right now when they read the article and figure out the ROI of all those investments and staff hires they approved to fund the generation of 5.8% of sales.