2019’s Ecommerce Growth, Groupon Closes Online Store, and Zappos’ New Customer VIP Program
U.S. Ecommerce Sales Grew 15% in 2019
The U.S. Department of Commerce released quarterly ecommerce figures this past week, shining a spotlight on the impact of ecommerce this past year. According to the Department of Commerce, consumers spent $601.75 billion online with U.S. merchants in 2019, a 14.9% increase compared to 2019’s $523.64 billion. As expected, this puts the annual ecommerce growth rate on a steady incline, easily topping 2018’s rate of 13.6%. Additionally, ecommerce accounted for 57% of all gains in the retail market last year; the largest share of online spending growth since 2008. 2019 was also the third time in U.S. retail history that year-over-year dollar gains for online purchases exceeded the gains for in-store spending in a given year.
What stood out to us? Time to sell the strip mall.
Groupon Shuts Down its Ecommerce Site
Groupon, a leading online shopping deals and coupons marketplace, announced this week it will be closing Groupon Goods, its branded online store. Groupon Goods sells a variety of apparel and electronics, and like its parent company, focuses on daily promotions and deals. At one point, Groupon believed the ‘Goods’ brand would become a major force in online shopping. However, for the third year in a row, revenue from physical goods sold by Groupon Good has declined, and profit from those sales fell by over 25%. This significant loss in profit has led Groupon to begin phasing out the Goods brand starting this week. “Goods has outlived its role as a business driver and has become a significant drag on our business,” says CEO Rich Williams in a letter to shareholders.
What stood out to us? Maybe Groupon should get into the business of redeveloping strip malls.
Zappos Revamps VIP Program to Improve Customer Loyalty
Zappos.com, an Amazon-owned shoes and clothing retailer, has recently revamped its VIP loyalty program in an attempt to increase revenue and build stronger relationships with its customers. The new VIP program, replacing a tiered rewards program, gives customers free next day shipping with no minimum purchase, rapid refunds on returns, double points for Amazon Prime members, and bonus points on select brands, among other perks. According to Zappos’ General Manager of Ecommerce Marketing Joseph Grusman, most of these new VIP perks come straight from customer feedback. “Our customers love free shipping and free returns,” says Grusman. “We took that customer feedback and offered any customer that signs up for Zappos VIP free next business day shipping on any purchase. The response has been overwhelmingly positive.”
What stood out to us? Using customer feedback to improve a business model. #solid.
In the headlines
- Harder Better Faster: Startup Shogun raises $10M to help ecommerce brands build faster websites.
- Feelin’ Blue: After a lackluster debut on the public market, Blue Apron may sell itself.
- Mind the Gap: The Gap is the latest retailer to enter the second hand apparel market to try to stay afloat.
- Personalized Petunias: Online flowers and gifts retailer 1-800-Flowers.com has acquired online personalized products retailer PersonalizationMall.com.
Before you go
Midway Dental Supply bridged the gap to ecommerce.
Nike and Converse’s online sales success thanks to consistent messaging.
Walmart’s online grocery business is winning over more affluent shoppers.
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