ETD: 889 Challenges with Global E-Commerce; Wireless POS Tech
Trims Retailers Costs; E-Commerce Retail Sales Jump by 24%
E-Tailer's Digest
etd_post at gapent.com
Tue May 24 09:27:36 GMT 2005
E-Tailer's Digest --- Everything for the Retailer
Issue #0889 May 24, 2005
George Matyjewicz, Moderator mailto:georgem at gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
----------------------------------------------------------------
CONTENTS
[1] Greetings
[2] Challenges with Global E-Commerce
[3] Wireless POS Tech Trims Retailers Costs
[4] E-Commerce Retail Sales Jump by 24%
----------------------------------------------------------------
[1] Greetings.
----------------------------------------------------------------
Hi All:
I'm in North Carolina this week reorganizing a client warehouse. They have
outgrown their warehouse and we need to figure out how we can function
efficiently. It's an interesting challenge, and I'll keep you posted.
Remember that discussion we had going about doing business outside your
home country? Today we have some excellent material on the perils of
global e-commerce. It's must read if you are looking at global
commerce. For example, are you able to accept konbini payments?
Along the same lines, e-tail sales have increased 24% in the U.S. Are you
on that bandwagon?
Wireless has become very cost-effective for retailers, especially when
verifying credit cards. How are you using wireless in your business?
Tell us about your business, which will remain for posterity at
our "Members: Who Are You?" site. This is a courtesy to our members who
contribute to our forum, and not merely a way to advertise for
free. Anything to do with the retail world, i.e., supplier, retailer,
consulting, etc. http://etailersdigest.com/resources/members/index.htm And
we have a form there for you to tell us about you. As I said when I first
proposed this idea, we have "known" each other for a long time, yet we
often don't know anything about each other. So, tell us who you are and
what you do.
Now, let's get to everything for the retailer.
Sincerely
George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem at gapent.com
http://www.etailersdigest.com
----------------------------------------------------------------
[2] Challenges with Global E-Commerce
----------------------------------------------------------------
For U.S. e-tailers, overseas markets are looking like irresistible targets
for expansion.
Around the world, Internet access is spreading and consumers are getting
more comfortable with e-commerce. In Europe, online sales are expected to
grow 33% annually over the next five years, compared with about 14% in the
U.S., according to Forrester Research
In China, consumers are getting their hands on more disposable income --
and have more opportunities to spend it online. Emerging markets such as
India and Russia are addressing poor online security and other issues that
have limited e-commerce there.
Lured by that potential, many U.S. Web retailers are creating specialized
versions of their sites for overseas customers. But most have found that
selling in foreign markets takes much more preparation -- and money -- than
expected.
Many retailers overestimate their own strengths and underestimate local
competition. Others learn the hard way that a successful U.S. formula
doesn't always translate to other markets. Then there are a host of other
potential pitfalls, from complex tax laws to different cultural attitudes
about credit cards to language barriers. Web veterans say the best solution
is to bring in seasoned local partners to teach you the nuances of the
market and shepherd you through the rules and regulations.
For a company that doesn't know the lay of the land, the pitfalls can be
huge. The problems start with the most basic step of all: getting the
rights to the Web address you want.
When entering a foreign market, most companies create a new site with a
local domain-name extension: ".co.uk" for British sites, for example.
Getting a local address "avoids the carpetbagger image of brash Americans
trying to own a market they don't understand," says Mr. Patterson. "Second,
consumers tend to buy locally." For instance, some surveys indicate that as
many as 80% of Europeans shop first at sites with local domains.
Master of the Domain
But registering a Web site overseas can be complicated and expensive. Each
country has its own rules for registration, and some may be much more
involved than the standard U.S. method: filling out a form online and
making a small credit-card payment. In France and Spain, for example, a
company has to establish a legal entity in the country, the equivalent of a
corporation, before it can register a domain name with the local suffix.
Apart from the paperwork, retailers heading overseas also face a greater
risk of "cybersquatting." In this shady practice, somebody else registers
"YourCompanyName.com," then charges you an enormous fee to buy the name.
Many countries simply give the rights to whoever filed the name first.
European Union rules say you can't cybersquat on well-known trademarks, but
each country has its own definition of what "famous" means, making it hard
to know if you're on solid ground.
To be sure, the situation isn't completely bleak. A key defense against
cybersquatting -- getting trademark protection in foreign markets as well
as the U.S. -- has gotten easier in recent years. The Madrid Protocol, for
instance, allows companies to obtain trademarks in about 65 nations with a
single application and fee. Having a trademark greatly increases a
company's chances of winning domain-name disputes, as well as securing
rights to variations of the trademarked name, says Jay Begler, former
director for the U.S. Trademark Association.
But companies can get blindsided by other legal distinctions and regulatory
practices. In Europe, for example, valued-added tax -- ranging from 6% to
25% of the purchase price -- is applied on all the goods a company ships
out of one country into another, up to a certain amount per year.
The taxes in a market like Brazil, meanwhile, are likely to completely
deter some e-commerce companies. While some products, such as books, are
exempt from import duties, and taxes have fallen significantly since the
early '90s, an item like a digital TV could double in cost once taxes are
added, says Michael S. Mensik, a partner specializing in e-commerce and
intellectual-property protection in the Chicago office of law firm Baker &
McKenzie.
Often, emerging markets such as Vietnam, China and Ukraine present security
risks as well. It's "primarily a function of the laws and penalties," says
John Strosahl, vice president of European operations for Digital River
Inc., an Eden Prairie, Minn., company that runs online stores for several
dozen clients, mostly software companies. "In some countries, such as
Indonesia, the legal system isn't as mature with respect to Internet fraud,
for example, and people find loopholes and abuse them."
Japanese consumers prefer to make online payments using a method called
konbini. Consumers pick out items online, but don't pay with a credit card.
Instead, they go to a local convenience store and give cash to a clerk, who
transfers the money into the online vendor's account. Not only is this
system alien to most U.S. businesspeople -- but foreign companies aren't
allowed to participate in it.
Germans -- who have a great trust in their banking system and a strong
cultural bias against debt -- much prefer to make online purchases with
wire transfers from their bank accounts.
Total Home Store, a division of Las Vegas-based Maisonette International
Enterprises Ltd., discovered that a popular U.S. sales tactic wouldn't fly
on the Continent: Europeans don't like to see discounted items. "If they
see it is discounted, they are wondering what's wrong with it, or there's
the feeling that they will appear cheap to buy it," says Alain Ghiai,
founder of the housewares e-tailer. So, when Total Home Store launches a
European site in September, it plans to simply post discounted prices for
items, without labeling them as such.
Details at...
http://online.wsj.com/article/0,,SB111627943374735073,00.html
----------------------------------------------------------------
[3] Wireless POS Tech Trims Retailers Costs
----------------------------------------------------------------
Barb Seitz's craft business is doing well, but the owner of Barb's Custom
Sewing needs to sells many of her products on the road, often at trade shows.
Today's wireless POS (point-of-sale) technology allows her to process
orders in the field, but she has received an unexpected bonus: lower
transaction fees because she rarely if ever needs to pay a "card not
present" charge. The typical retail technology arguments for wireless
investments revolve around convenience, speed and efficiency.
But as retailers push the portable POS units well beyond the storefront—to
delivery people, repair technicians and sales reps working shows—they also
are finding it much easier to never pay the "away from a terminal" charge
of which credit card companies are so fond.
The specific rates that retailers pay to credit card companies vary
depending on the retail establishment's size, the credit card and many
other variables.
But typical direct-connection rates are about 2.1 percent, compared with a
2.5 percent for "card-not-present" and as much as 4 percent if the merchant
has to phone in the charge, said Donald Brown, a product manager in the
wireless group at Moneris Solutions Inc., a wireless POS vendor.
"There are cost justifications that can be made from several different
standpoints," Brown said, citing a restaurant's ability to theoretically
reduce the time between a customer giving a credit card for payment and
when the customer is able to leave.
"It can take about seven minutes from when you ask for your check and when
you get it," Brown said. "If you're saving about seven minutes per table,
you can probably fit in more tables per server per night."
The favorite wireless argument for credit card companies, though, is the
potential for fraud reduction, as Seitz has discovered.
When she is selling at a show, most customers are strangers. Before she
went wireless, she would take card imprints and run them through at her
store the next day. "When I took the card imprint and gave them the
merchandise, I had no idea if it was a good card or not," she said.
Before she switched to wireless, one recent customer had a bad card and
stiffed her for about $100, she said. If she had been able to run it
through wirelessly, she would have learned of the problem before
surrendering the merchandise, she said.
Seitz said she also appreciates the long battery life of most of today's
wireless units, allowing her to work in environments where an AC connection
is not always available.
The downside? She has to hope that her booth space is able to receive the
wireless signal.
http://www.eweek.com/article2/0,1759,1817539,00.asp
----------------------------------------------------------------
[4] E-Commerce Retail Sales Jump by 24%
----------------------------------------------------------------
E-commerce sales surged in the first quarter, a probable sign that
consumers are growing more comfortable making purchases online.
U.S. Internet retail sales rose 24% to $19.8 billion in the first quarter,
compared with $16 billion in the year-earlier period, according to
preliminary numbers released by the Department of Commerce on Friday.
E-commerce sales during the first quarter rose 6.4% from the fourth
quarter, when they were $18.6 billion.
The Commerce Department said e-commerce sales accounted for 2.2% of total
retail sales in the first quarter, when those sales were an estimated
$916.9 billion.
Sales for all periods are on an adjusted basis, meaning the Commerce
Department adjusts them for seasonal variations and holiday and trading-day
differences but not for price changes.
The department's e-commerce sales estimate for the quarter is in-line with
what was expected, Legg Mason Wood Walker analyst Scott Devitt said. He
added that the rate of retail sales growth on the Internet in the U.S.
during the past four quarters has been fairly stable in the low to mid 20s,
and that stability is a good sign for long-term growth.
With the U.S. retail e-commerce market maturing, there's a shift occurring
in the purchasing patterns of consumers back to more traditional features,
Mr. Devitt said. Consumers are looking beyond price and considering other
factors such as return policies and shipment tracking when taking into
account their experience on a retailer's Web site, he said.
The jewelry category has had fairly rapid growth lately on the Internet,
Mr. Devitt added. Consumers have taken longer to get comfortable purchasing
jewelry using the Internet because it has higher average selling prices
than many other items.
Details at...
http://online.wsj.com/article/0,,SB111660963814839352,00.html
----------------------------------------------------------------
Links to follow
----------------------------------------------------------------
GAP Enterprises, Ltd. http://www.gapent.com/
E-Tailer's Digest http://www.etailersdigest.com
Interim Help http://interimhelp.com
Sophisticated Me http://sophisticatedme.com/
Marketing Your Web http://www.gapent.com/myweb/
Automated Press Releases http://www.automatedpr.com
More information about the ETD
mailing list