Adoption Rates Rising For Online Channel - Twice

Adoption Rates Rising For Online Channel

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TWICE: It seems the sales environment is different on the Internet. Circuit City has been reporting double-digit growth online and Amazon.com had another record holiday season.

Noah Herschman, Amazon.com: Yes, our 13th in a row, and it was strong in electronics across most categories. I really think our customers are starting to feel much more comfortable shopping online for electronics than they used to. Maybe that's because we're giving them more information. We have all of the customer reviews now, which are pretty substantial and correlate accurately with sales. For example, the Garmin Nuvi 350 was our most highly reviewed consumer electronics products with something close to 1,300 or 1,400 posts and is one of our best selling. When you have that many, and they're averaging four-and-a-half stars, you can feel pretty sure that it's a piece other people appreciated and one that you can feel comfortable buying.

The truth is that a bad review on Amazon.com, or certainly more than one bad review, can really, really slow down sales of products. Conversely, if you get a really strong review, and they are consistently strong, it can really put some wind beneath the velocity of products. So, it works both ways.

Douglas Moore, Sears Holdings: What Noah is describing is replacing the traditional role of the merchant that we all lived and liked. The Web is actually making the consumer the merchant. The consumer is starting to edit the assortment for us.

Those are the voices that we need to pay the most attention to; and Amazon has the best mechanism to do that in the business so far. Reading those reviews is helpful for us. We look at them, and say, "Wow, these people are excited about this brand. Maybe we should be more excited about this product." So, keep those reviews going.

TWICE: Wasn't Circuit City was one of the first shopping sites to post user reviews?

Irynne MacKay, Circuit City: Yes. We want to be the place that provides all of the information for a customer to decide, as well as the product, all the accessories, the service and the convenience of picking up their purchase in-store. I think all retailers have that responsibility, and it really is up to the retailer to determine to what degree they have a completely unbiased view that really just helps the customer through that journey.

Herschman: We also did some new things. For example, with TVs — and we did have a very strong television season — we were able to extend the order window by almost a week past the prior year and still guarantee to get your TV under your tree by Christmas. If that's where you wanted to put it.

TWICE: How did you swing that?

Herschman: We worked with our white-glove delivery partner, Eagle. Each one of our televisions now has free white-glove delivery as part of the price, which means you take the TV out of the box, you set it up where the customer wants, and you make sure it works and that things are hooked up correctly before you leave. It really is starting to become a convenience play too.

Online sales may never replace bricks-and-mortar sales, and that's really not our intention. I believe Jupiter reports that the Internet still accounts for around 20 percent of all electronics sales in the United States. But we do believe that there are customers who feel comfortable taking their time, reading information at their leisure, and diving in as deep as they want.

Another big factor for us is that we have really the Earth's largest selection. Right now we've got a million products that you can order and, if you're an Amazon Prime customer, get with free second-day shipping. So for us a customer may want to really explore, see what's out there and take their time. Then, when they click the button, they can be pretty much guaranteed that they're going to get that product delivered very, very quickly.

A couple of stats from the holidays: On the 10th of December, our biggest day, we took orders for 5.4 million items — about 62.5 a second — and we shipped out 3.9 million packages to 200-plus countries. The infrastructure that we created to get the right thing to the right place 99 percent of the time has really been our strong suit. I think that's what customers really appreciate at the end of the day.

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