Well folks, this weeks eCommerce reading list is the last one of 2016. It's been a phenomenal year for the eCommerce and tech industry and we can't wait to see what 2017 brings. For this last week of 2016 Rent the Runway raises a $60 million dollar funding round. TJ Maxx doesn't plan on making eCommerce a priority. The Globe and Mail poses the question "should retailers pay for customers to return merchandise?" And Amazon is one step closer to releasing drones used to deliver online orders.
Source: TechCrunch
The fashion eCommerce house that allows women to rent designer brands has raised another $60 million in funding that was led by Fidelity investments. Other participants include Technology Crossover Ventures, Bain Capital Ventures, Highland Capital Partners and Advance Publications. The company which continues to grow every year was valued at $520 million just two years ago in 2014 which means the current valuation is quite a bit step up. CEO Jennifer Hyman recently hinted at a possible IPO soon when she told Recode that Rent the Runway was valued the way public companies are. She also told Recode that the company has grown its revenue to over $100 million on an Ebitda basis. With the new round of funding the company has plans to roll out more initiatives and physical stores. Rent the Runway recently rolled out something they call their “unlimited” service which allows customers to rent items on an on-going basis for $139/month. The company is also building brick-and-mortar locations in Chicago, Los Angeles and New York. Hyman said in an email to TechCrunch “This new round of funding will allow us to continue revolutionizing the fashion industry by giving millions of women access to designer brands...We will do this by accelerating the growth of our a la carte and subscription products, as well as our retail footprint. We will also further build out our operational capacity, which includes our world-class reverse logistics platform.”
Source: Internet Retailer
We are positive this headline from Internet Retailer grabbed your attention as there were many holiday records set once again when it comes to online shopping. According to Adobe Digital Insights, Cyber Monday Sales totaled a record setting $3.45 billion, more people shopped online throughout Black Friday than in physical locations, and stores such as Wal-Mart and Amazon saw consumers shopping beyond Black Friday and throughout the following week. So why does T.J Maxx feel like they don’t need eCommerce? The company is owned by the TJX Cos Inc. group which also includes Marshalls. The company turns over merchandise very quickly, so for regular visitors this means they get to see new inventory almost every visit. This idea of discovering something new is too great for many consumers to pass up. One frequent shopper of TJ Maxx, Kimberly Dulude had this to say “I kid you not, I could spend hours in there.” Kimberly stated she likes to begin her shopping hunt with the clearance aisle. Then she works her way up to shoes. Beauty is next, and this continues until she gets to the front of the store. TJ Maxx is able to offer their customers like Kimberly merchandise from over 18,000 vendors at a discounted price and they do so very quickly and with more than 2,500 U.S. stores, the company places products into the right stores, focusing on local trends. Their method is working. In the past five years shares have more than doubled and revenue has been up more than 30% during the same time period. Last year, TJX’s 10 brands made almost $31 billion in sales. So what can eCommerce brands learn from this? “When stores like T.J. Maxx do it right, they leave their shoppers filled with feelings of adventure and serendipity” says Jordan Rost, vice president of consumer insights at Nielsen, a research firm. “Even an unsuccessful trip to a discount store can reinforce the thrill of the hunt.”
Source: The Globe and Mail
Jerome Gagnon-Voyer, owner of Cambio Market, told The Globe and Mail that in order for an online merchant to be successful they need to have a solid return policy. It’s not enough to offer free shipping. “It’s all about trust,” Mr. Gagnon-Voyer says. “Online, people are sometimes unsure about what they might be getting. If you make it overly complicated to return something, maybe they won’t order from you in the first place.” Backing up this statement is Suthamie Poologasingham, a senior advisor on eCommerce for the retail advisory firm J.C Williams Group. Suthamie says that it’s important to offer free shipping on returns so that customers become familiar and comfortable with a an online store. “Free shipping could be cheaper than getting that customer back through other marketing means,” Poologasingham said. Daniel Baer, a retail expert with EY Canada, believes that online merchants can use returns as a learning opportunity. My Baer told The Globe and Mail “Take advantage of the return. Are there specific products that are always being returned? Is it a size problem or a shape problem? There could be controllable reasons for why people are returning things,” In addition, he believes that an eCommerce store must provide as many details as possible about a product and include customer reviews. These are ways to cut down the amount of returns to an online store.
Source: TechCrunch
Since 2013 it’s been heavily circulated that Amazon has plans to introduce drones to the market that will carry eCommerce packages to online shoppers homes. Earlier this week new patents circulated around by CB Insights’ Zoe Leavitt show details about how the drone deliveries would work through airborne fulfillment centers. These centers would be stocked with inventory and placed in strategic positions according to where certain products do well. Drones would be stocked at these centers as well, awaiting scheduled or on-demand deliveries. It seems as though Amazon is one step closer to making drone delivery an actual thing.