E-Commerce Seen Cutting CE Foot Traffic This Holiday Season

Retail foot traffic is projected to climb 2.8 percent during November and December over the same months last year, though foot traffic for consumer electronics is expected to stumble 8 percent on the impact of e-commerce, Bill Martin, founder of ShopperTrak, told Consumer Electronics Daily Wednesday.

"I don’t want to call everything a commodity,” Martin said of the CE category, “but it’s fairly well-defined” in terms of model and serial numbers, making the category easy to track for consumers who knew what they want. Shoppers can do a lot of research online to get the best price, Martin said, compared with pre-e-commerce days when they'd visit two or three locations to research a product and then “buy from the individual who had the most knowledge or gave them the best experience."

Fewer electronics-centric brick-and-mortar stores accounts for some of the falloff in physical traffic at electronics stores, Martin said. Target and Walmart are selling electronics in some categories, partially making up for the exit of Circuit City that “left a hole” in consumer shopping options, he said. For reporting purposes, though, Walmart and Target shopping figures are grouped with mass merchant categories rather than electronics, he noted.

The trend away from brick-and-mortar shopping for CE products is likely to continue, unless a product hits shelves that would excite people to the point that they'd have to see a demonstration, but nothing appears to be on the horizon that fits the bill, Martin said. The iPhone 5 will make a “splash” in September and October and experience a halo effect in November and December, he said. Nothing will create levels of shopping interest that digital cameras and flat-panel TVs did when they first came on the scene, he said. Phones and tablets will be hot this season, Martin said, but won’t necessarily drive people into stores.

Technology as a shopping tool will grow in importance as consumers use apps and social media on smartphones and tablets to research, compare and buy, Martin said. “Retailers need to get involved in the ‘omni-channel’ approach,” coordinating strategies of physical stores, the Internet and mobile commerce, he said. Mobile commerce has a way to go, he said, before it achieves its potential of one-to-one marketing and enabling consumers to buy products via mobile devices. Progressive, forward-thinking, retailers will be working toward an integrated strategy, using the Internet to drive people to stores, using stores to drive people to the Internet and using the mobile commerce to integrate the two, he said. “The roots are in place,” he said, “and we expect to see a dramatic utilization of that technology over the next couple of years.” Today mobile commerce “is not as viable as it needs to be to get a high adoption rate among retailers,” Martin said. “The cost has to come down, the technology has to be perfected and privacy laws have to be understood before it’s commercially viable."

Election year activity is expected to impact consumer shopping behavior in 2012, following historical trends of 2004 and 2008, Martin said. “Consumers head to the sidelines leading up to the election,” he said, as a result of media time being consumed by political ads. “Retailers don’t have as much opportunity to market,” he said, and consumers’ attention is focused on the election. Once the election is over, regardless of the winner, “pent-up demand begins to release the weekend following the election,” he said. In non-election years, retailers’ holiday season marketing typically begin in late October or early November, Martin said. But this year he said ShopperTrak is encouraging retailers to be “prudent about marketing dollars spent before the election because they might fall on deaf ears.”