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The other day I got a call from a writer for the AP who asked me an intriguing question: Why aren't online sales a bigger piece of the retail sales pie (analysts estimate they account for 7 to 10 percent of sales)?
So, why aren't online sales higher? There is so much hype about the Internet and how it's changing the world.

Here are my answers to these questions, but I'm interested to know what you think.

  1. There have been long known security concerns that consumers have that keep them from buying online. But these concerns are likely to be less over time.

  2. Many products sold on the web are experience goods - meaning you need to experience them (touch, try them on, etc.) to really evaluate them. Its a lot easily to experience these products off-line, and buy them off-line.

  3. Online retailers are still losing people by not having clear checkout processes. Shopping cart abandonment rates are still relatively high as people are not clearly seeing the total cost of a purchase until they get to the end of the purchase process (oftentimes you only find out the total cost - including shipping - when you are putting in your credit card). So, this, I think reflects some frustration with online shopping.

  4. Delayed gratification...we live in a culture that is marked by increasing levels of need for instant gratification (real time search, Twitter, etc.). In contrast, online shopping results in delayed receipt of items purchased (whereas you can go to an offline store and bring what you bought home immediately). Online retailers have tried to respond to this by giving customers more options for fast delivery, but this comes at a cost to customers and thus levels the so-called cost advantages of buying online.

  5. Online shopping is best for goal driven purchases, but not as good for simple browsing. If you're looking for a specific book, online purchases are great (assuming you don't want instant gratification - which of course, Amazon and other are trying to get around with Kindles and other readers). But in a wide variety of categories, I think people actually enjoy the shopping experience where finding unplanned items is the norm.

So, maybe online buying will hit some high point and end there, rather than end world ending up where everything is bought online. But all of this is now just predictions. What do you predict?

Continue reading "5 Reasons Why Online Sales Aren't a Bigger Share Of The Holiday Pie" ... Read the full article

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image of Allen Weiss

Allen is founder, CEO, and Positioning Practice Lead at MarketingProfs. Over the years he has worked with companies such as Texas Instruments, Informix, Vanafi, and EMI Music Distribution to help them position their products defensively in a competitive environment. He is also the founder of Insight4Peace and the Director of Mindful USC.