New “State Of Retailing Online” Doc To Be Released On Shop.org Next Week

The findings from part two of Forrester’s annual survey conducted in conjunction with Shop.org will be available on the Shop.org site next week.  This installment of the "State Of Retailing Online" series will delve into the world of key metrics as well as multichannel and global strategies.

 Some highlights include:

  • Identifying improvements in performance and customer retention
  • Developing strategies for successful global expansion
  • Avoiding the pitfalls that many multichannel organizations face

 We look forward to sharing the full version on Forrester.com near the end of October.

Will Collecting Online Sales Tax Really Make The Difference?

Okay, so it’s no Brown v. Board of Education, but for those in retail, the 1992 U.S. Supreme Court case of Quill v. North Dakota could be considered just as landmark.  For the uninitiated, it spelled out the regulations surrounding collecting sales tax for states in which they have no physical presence – in short, that they weren’t allowed to do it.

With elections around the corner, many politicians and associations are stumping on this very issue.  They believe that many retailers are exempting themselves from paying the sales tax that the state ultimately deserves.  After all, 45 states in total collect sales tax from brick and mortar stores, which end up accounting for roughly 25 percent of their total income.  Sensationalism abounds in the discussion of this lost revenue: "Some of the things that have gone on in this recession would not have happened if sales taxes had not gone uncollected," said Scott Peterson, executive director of Streamlined Sales Tax Governing Board.

Since 2003, a majority of the remaining retailers have followed suit in collecting tax, leaving pureplays, many of whom are mom and pops who in this economy are at least earning income. Assessing taxes on these businesses won’t really help anyone except Walmart. And let’s be realistic here: Even studies like the one by the University of Tennessee say only 25% of eCommerce sales taxes that are “due” go uncollected. And we know from our surveys that 65% of people say that Web sales taxes (if increased) would cause them to decrease their online spend. With these facts that chip away at the supposed billions that supposedly go uncollected, this appears to be a much less pervasive issue than once put forth. 

Read more

Toys "R" Us Throws A Hail Mary Pass With Pop-Up Stores

On Wednesday of last week, Ann Zimmerman of The Wall Street Journal reported on my former employer, Toys “R” Us, which is planning to open up 600 temporary “pop-up stores” in anticipation of the holiday shopping season.  The WSJ describes it as a super-sized bet while the company maintains it is a proven strategy.  Like most prospective retail decisions in this uncertain economic period, it is likely a mixture of both.

Ann certainly has some legitimate weight behind her assertions:

  • The space in which the pop-up stores will reside is distressed for a reason.  Who can guarantee that a watered-down version of Toys “R” Us will be able to overcome inherent issues such as poor foot traffic or a bad location?
  • Toys “R” Us has historically experienced issues with inventory; the majority of it never turns and Toys "R" Us often sells out of its best sellers before the season comes to a close.
  • While trends show improvement, there is no guarantee of economic rebound for the holiday seasons.  This could spell disaster if Toys “R” Us moves forward with 600 new shops.
Read more