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Happy Friday, everyone! It’s the first week of April and we sincerely hope you survived both physically and emotionally from any mid-week pranks. Luckily, with Easter on the horizon, you’ve likely been seeing an upswing in spring sales as the weather warms and consumers begin to do what they do best: consume.
Below, we’ve rounded up this week’s top ecommerce news. Chanel, Celine and Dior discuss why the luxury retail industry is so late to the ecommerce game; Amazon has filed a patent to streamline the retail shopping experience; Forrester has released new data on the booming B2B ecommerce market; and India’s largest retailer, Flipkart, is about to raise another round of funding to the tune of $600-800 million.
Chanel Announces Ecommerce Launch for Late 2016
Chanel is the last of three luxury retailers which have yet to step foot into the ecommerce waters, but soon, they’ll be leaving behind only two.
This week, Bruno Pavlovsky, Chanel’s president of fashion, told WWD that his luxury brand will be going online by late 2016. There is no word yet on which categories Chanel will launch there, but Pavlovsky did mention that Chanel acquired brands including glove-maker Causse, milliner Maison Michel, and cashmere house Barrie Knitwear will have separate ecommerce stores launched around the same time in an effort to develop those brands.
For luxury retailers, 94% of purchases still occur in-store, which might be why luxury brands Celine and Dior are still holding off. However, Celine parent company Yoox acquired luxury online marketplace Net-a-Porter, ahead of rumors that Amazon was looking to purchase the site, on Monday. Yoox shares shot up upon the announcement, and many in the tech and fashion sphere see this merger as merely the early days in the life of what will be a fashion-tech giant.
In all, the rise of ecommerce is forcing luxury retailers into the online space, either via their own branded websites or through luxury marketplaces. It’s beginning to look like the luxury brands are facing the very same challenges as every other retailer out there: the absolute need to be omnichannel.
Amazon Patent Application Solves for Omnichannel Shopping
Yes, luxury retailers are finally getting on board with ecommerce, but that doesn’t mean that brick-and-mortar is going anywhere anytime soon. In fact, studies show that ecommerce needs brick-and-mortar, mostly because shoppers prefer both options. It’s why Warby Parker, Birchbox, TOMS Shoes and Frank and Oak, to name only a few, have opened up physical shops.
Indeed, as luxury brands slowly begin to launch online, once online-only brands are putting their feelers out in the physical world. The whole shift is a move toward omnichannel, and you can rest assured that ecommerce leaders like Amazon aren’t going to sit idly by as our on- and offline worlds merge.
It turns out that Amazon may very well be looking to perfect brick-and-mortar shopping the same way it did ecommerce. Their focus? Emphasize convenience.
According to Re/Code, “a recently filed patent application by Amazon reveals details about a new kind of retail establishment that would allow shoppers to pick items and leave without stopping at a cashier station or kiosk.
Based around the idea of complete convenience, such a store would work using a system of cameras, sensors or RFID readers that would be able to identify shoppers and the items they’ve chosen, according to the application, which was filed in September and published in January. The technology would also potentially give Amazon a more cost-effective way to compete with traditional retailers by operating a store that doesn’t require cashiers and could similarly serve as a place to pick up online orders.”
By sounds of the patent application, Amazon may have perfectly figured out omnichannel –– killing two birds (both brick-and-mortar shopping and online ordering pick up) with one very strategic stone.
B2B Ecommerce Sales to Top $1 Trillion by 2020
Consumer ecommerce may be the darling of the ecommerce industry, but B2B ecommerce is where the money’s at. According to a Forrester report released this week, B2B ecommerce sales in the U.S. will top $780 billion this year — more than twice the most recent figure of $304.91 billion in U.S. retail ecommerce sales released by the U.S. Department of Commerce, for 2014 — and is on course to grow at a compound annual growth rate of 7.7% until it reaches $1.13 trillion in 2020.
In general, B2B online sellers are manufacturers, wholesalers and distributors –– many using platforms like Alibaba rather than Amazon. What’s causing this growth? Self-service, for one. B2B companies can slash the costs of serving and selling to customers by as much as 90% by introducing self-service ecommerce features, the Forrester report said. It also noted that 52% of B2B executives say they have reduced their customer-support costs by migrating offline customers online, and that 56% say they have customers they can only serve profitably online.
Self-service, though, isn’t the only driver. Similar to trends in the consumer retail space, those looking to purchase from B2B prefer shopping, or at least researching products, online. In fact, according to the report, 74% of B2B buyers today research at least one-half of work-related purchases online, and 30% complete at least half of their work-related purchases online.
In short, the B2B ecommerce industry is booming.
India’s Ecommerce Industry Poised to Produce Its First Two Billionaires
Meanwhile in India, ecommerce has been on the up and up, with one ecommerce site in particular leading the pack. Flipkart, India’s largest retailer both online and offline, raised $1.9 billion in 2014, including a $1 billion round with investors including the New York-based investment firm, Tiger Global.
New reports suggest, and experts have confirmed, that Flipkart is in advanced talks to raise $600-800 million which will value the online retailer at $14-$15 billion. An unnamed investor told Forbes that a deal is likely in the coming weeks. This valuation stands to make the founders of Flipkart, Sachin Bansal and Binny Bansal, who share the same last name but are not related, India’s first ecommerce billionaires.
Both Bansals worked at Amazon prior to launching Flipkart in 2007, which was first an online bookstore (see any similarities?). Today, according to a report by Morgan Stanley, Flipkart has 44% of India’s ecommerce marketshare, followed by its competitor Snapdeal which has 32%.
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