Welcome to the live blog of ChannelAdvisor’s Catalyst 2014. We’ll be live blogging the general sessions to make sure Catalyst attendees don’t miss anything. Also, make sure you’re following hashtag #Catalyst2014 and @ChannelAdvisor on Twitter for all the latest.
Speaker: Scot Wingo, ChannelAdvisor CEO
Keynote Title: E-Commerce. Accelerated.
Welcome to the eighth annual Catalyst! Let’s look back at 2013:
E-commerce is growing at 11%, three times the rate of brick and mortar. And consumers are increasingly doing their shopping online — total retail foot traffic for November and December 2013 was down to 18 billion, or half of what it was in 2010.
Have you seen any malls built recently? We haven’t, either. Not one indoor mall has been built in the US since 2006.
Let’s look at the #1 online retailer, Amazon. There’s 237 million users and $74 billion in sales. These numbers will grow, to 266 million and $84 billion in 2014. How does Amazon do this?
In 2006, they had a partnership with Toys R Us. Deployed a third-party book marketplace for toys. And then they introduced Super Saver Shipping. Now, they’ve introduced Prime. Their growth has been faster on e-commerce. Amazon’s 3 Flywheels:
1. Third Party Marketplaces
Amazon is 2X as big as everyone thinks it is, when you consider its third-party marketplace.
2. Amazon Prime
Helps connect all these flywheels by giving consumers 2-day shipping. 10% of Amazon’s users are Prime subscribers, and they spend 4X as much as the regular Amazon shopper.
3. fulfilment Network
Amazon has over 100 fulfilment centres; Amazon’s shipping costs are going down, because their fulfilment centres are close to large population centres. So the cost to ship products is decreasing. There’s more shipping innovations made each day — drones are just a recent example.
Marc Andreessen wrote a 2011 essay, with a premise that software is eating the world. In 2014, this makes a lot of sense. Zipcar, Netflix have become popular; snail mail is eaten by email. These disruptions happen quickly. Everything is driven by software: Even at Starbucks, you can pay online. Uber is disrupting the tax industry.
How does this affect e-commerce?
We at ChannelAdvisor believe that marketplaces are eating the e-commerce world. The key benefits of marketplaces are selection, value, convenience and confidence.
eBay has introduced the Defect Rate — a whole new system for measuring the top-rated seller rating. About two-thirds of people won’t be affected, but many will. If you’re here at Catalyst, we can walk you though what this means for you.
Why marketplaces now?
Marketplaces are aligned with consumer demand and expectations. Consumers want limited buying options, best price, fast/free shipping, purchase protection.
Let’s invite Soren Mills, CMO of Newegg, up to the stage now. Newegg is leading seller of consumer electronics and IT products online. Newegg customers are passionate about commerce experience and wanted to see an expansion of categories. We found that as we did this, we brought in new customers in new product categories. Before that marketplace, we were 90% male. As we opened up the marketplace, we’re now at 70/30.
We keep our specialty retailer core and audience base as we expand. It’s been a surprise to us how many consumers who come in for new categories also shop in IT categories. We invested early in mobile and are always adding new content and features on our mobile site.
Newegg’s marketplace sales are growing at triple rate. We see our marketplace is a key part of the future for Newegg. Ship by Newegg is our new program with 2-day shipping. We handle shipping and fulfilment.
Reminder for the Catalyst America’s social presence:
• Follow @ChannelAdvisor on Twitter as we’ll be tweeting out updates, reminders about sessions, networking events and more.
• Tag your social posts, Instagram pics with our show hashtag: #Catalyst2014 tabs on discussions, networking opportunities and more on the Catalyst app.
• Keep an eye on the ChannelAdvisor blogs where we’ll be live blogging the keynotes and main sessions at Catalyst.