2008 Predictions for Internet Retail


Everyone else is making predictions, so I guess I will get in on the fun too. The best thing about making predictions is that you will never remember them by the end of the year anyway. (unless I get them right, in which case I will remind you!)

Here goes…

1) Death of the little guy. This is already happening, and the trend is going to continue. It is simply going to become more and more unfeasible for small budgets to compete online. That is not to say that there will be exceptions, but you will hear about fewer and fewer of them.

If you fall into this category, you are feeling the squeeze already. Your revenue is stagnant or falling, and you are finding it harder and harder to get sales. Here is my best advice for you. Take 2008 and focus on your brand instead of revenue. Your success depends on it. Yes, it is not easy, but it will be necessary in the coming years. If you cannot sell products under your own label, focus on your company image as a whole.

2) Retailers will depend less on SEO. SEO success is not going to be easy or even possible for most retailers, and smart retailers are going to learn to get their traffic in different ways.

Ironically, moving away from search engine optimization will probably help your search engine rankings in the long run. There is little doubt in my mind that the most popular companies will eventually dominate their retail niches in search engines. If you can generate your traffic based on your brand itself (increase your popularity), you will eventually see good results in the SERPs.

3) Social marketing explosion. Online advertising continues to be inflated in most sectors, and more and more marketers will attempt to create demand with such strategies as viral campaigns and stealth marketing. Things are about to get very crowded out there in the social networks.

While a bit risky, social marketing still is more cost effective than CPC advertising. That will be the case for a while until the whole phenomenon collapses under its own weight. We are already at a point where you have to take every user review with an gigantic grain of salt. Before long, social marketing will become the new MLM model where armies of individuals parrot marketing hype online in order to make a few bucks selling something to a friend.

While I probably sound a bit cynical on this topic, I am a big believer in social/viral marketing. You should definitely explore it for your business.

4) Online fraud. Wow, these fraudsters are coming out of every where. They are getting more sophisticated all of the time. While we used to be safe in this area (what thief would steal vitamins?), we are now rejecting an amazingly high percentage of orders.

If you do not strategies to protect yourself, it is time to come up with some. Collecting the CVN number on credit cards and calling to verify customers who place large orders are two procedures that are becoming necessary.

5) Manufacturer action to control pricing. I have said many times that internet retailers can be the biggest enemy of a brand. If you own a brand that you let internet retailers sell for you, you have to be very careful.

Fortunately, in 2007, the Supreme Court has opened the door for manufacturers to better control the price their products are sold at. Many manufacturers are already implementing MAP policies with teeth in them and cutting off retailers who break the rules.

If you have built your business by piggy-backing on your competitors’ advertising while under-cutting them, you are in trouble. It is time to come up with another marketing strategy.

6) Online retail will grow X%. OK, I have no idea what X is, but I would guess less than 20%. Who cares anyway? You can grow faster than average anyway if you work hard!

So, in conclusion, it really comes down to this. I am bullish on retailers who have a strong brand and bearish on retailers who have not focused on their brand. Have a happy and prosperous 2008!

  • http://www.readscott.com Scott Magdalein

    Of course, all of us bloggers are hoping for increased social media advertising. Especially as blogs begin to replace tradition media as primary news and info sources.

  • http://www.marketingpilgrim.com Andy Beal

    Some interesting ideas Greg. I see you’ve baited the SEOs again. ;-)

    Not sue I agree that retailers will move away from SEO, but I do agree that they will add other channels to the mix. This won’t reduce the effort spent on SEO, but will have the effect of reducing their dependency–as you suggest.

  • http://www.retirement-quotes.com Ernie Zelinski

    I have been using a bit of viral marketing and it has helped a lot.

    One of the viral marketing tools I use is giving away over half — the top half only — of my book “How to Retire Happy, Wild, and Free”. (The top half is available as a PDF at http://www.real-success.ca/free_ebooks.html ).

    Today if anyone types in “retirement” into Amazon.com’s search engine, “How to Retire Happy, Wild, and Free” comes in the number 1 position
    — out of over 175,000 books that Amazon puts in the retirement category.

    Given that over 95 percent of the 190,000 books published in North America every year will never sell more than 5,000 copies, my book has done very well. It has now sold over 75,000 copies.

    Of course, word-of-mouth is still the most powerful advertising for any product or service.

    Ernie Zelinski

    Author of “The Joy of Not Working”
    (Over 225,000 copies Sold and Published in 17 Languages)
    Featured at http://www.thejoyofnotworking.com

    and

    “How to Retire Happy, Wild, and Free”
    (Over 75,000 copies Sold and Published in 7 Foreign Languages)
    Featured at http://www.retirement-quotes.com

  • http://www.greatpriceshere.com Nicole

    Interesting thoughts. I don’t think dependency on SEO will reduce. In fact, more and more people are realizing the importance of ranking well on search engines to drive traffic to their sites. Also, I think small retailers providing price advantages will always be in business. Price is still the most important factor considered during a purchase.

  • http://www.gowfb.com/ GoWFB

    Some of your predictions are general enough to turn true ;). Anyway we shall wait and watch to see how many of your predictions actually hit the target.

  • http://www.theratingblog.com Alan Johnson

    I agree with #3, social marketing will definitely become an even more important part of the equation and, as a result, the competition will end up being fierce.

    Alan Johnson

  • http://EdwardKhoo.com Edward

    Social marketing is going to improve a lot this year, as people are impatient to wait for getting a better SERP, expect to see some competition over there

  • http://www.vitabase.com Greg Howlett

    Certainly, SEO will remain important in the traffic generation plan of most retailers, including my company. However, only a naive and/or foolish retailer will put all their eggs in that basket.

  • http://www.GoldSluiceBoxes.com Matt Fritz

    I don’t think there will be the death of the little guy. I think that if anything, the Internet helps the little guy. Sure you may not be able to compete for iPod buyers but you can always be the best in ultra tight niches.

  • http://www.theratingblog.com Alan Johnson

    Of course, nothing is impossible, but, unless you have a huge budget to work with or bring some serious innovation to your field, ranking for certain terms is out of the question.

    Alan Johnson

  • http://www.earlyimpact.com Massimo Arrigoni

    “death of the little guy?”: I respectfully disagree. At Early Impact we have thousands of users of our ProductCart software, and many are little guys.

    We have seen many, many of them do very well on their ecommerce stores over the years. Some have gone from nothing to millions in sales.

    However, there is a secret. The ones that prosper are the ones that are able to focus on a niche. When they know their niche well, they succeed. We’ve seen it over and over.

    Among other things, SEO comes almost natural when a Web site is truly focused on a niche market. By definition all content is focused and related to set of keyword phrases that are common in that market.

    So, little guy: become a guru in your niche, focus 100% on it, and stay happy! You can do quite well on the Web in 2008 if you follow this strategy.

    Massimo
    CEO
    Early Impact
    http://www.earlyimpact.com

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  • http://www.icxpresidents.com Matt

    Over the last 4 years we’ve really seen some exciting new sites pop out of no where. ie: google (moved up in popularity), facebook, myspace, youtube, etc etc etc. So lately I’ve been wondering what’s going to be the next big site that’s going to move up the ranks. The interesting thing to note is that pretty much all the sites that grew exponentially is size and scope have been social networks of some form or another. That being said if you’re looking for new ways to promote your site then read my book “300+ ways to promote your website online”, you can get a copy at my website http://www.icxpresidents.com

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