Retail Media – Rising Market

Currently and over the last few years, online retailing has boomed. The number of online shoppers has increased. Especially in Western Europe, approximately 140 million people use online shopping portals regularly. Online Retailing or online shopping is a kind of electronic business. Consumers are buying goods directly from the retailer without any middleman or intermediary. 

Therefore it is a kind of direct sales. The generic term of such a form of sale is e-Business, meaning business on the Internet. The main activities of e-Business are buying, selling, servicing customers and collaborating with business associates.

I worked for two years for a big e-Business start-up company which is located in Germany called Zalando. I worked there as a student employee at the supply chain management department. Zalando specializes in footwear but has also a wide range of clothing and beauty products. It is a very young company but fast-growing as well. 

My decision to work while attending the university was motivated by the idea to get an insight in the field, especially logistic know-how in contrast to the wide array of theoretical foundations I am learning at the university. This company was founded in 2008 and had a sales of over $660 billion in 2011. According to that, I was a part of this quick and strong growth. Now they are already expanded all over Europe.

The increased usage of using online shopping methods correlates intensively with the increased amount of start-up companies in that special field. Online retailers operate an intense marketing program and create a unique shopping experience for the consumer with a lot of advantages, like a fast delivery, the opportunity to return products for free without giving any reason and to supply an intensive customer support through a well-established service system. 

For example, Zalando´s first commercials underlined the opportunity to return their delivery free of charge. The slogan was: “Shout for happiness or send it back”. The following commercial demonstrates the type of marketing of Zalando.

However, the high ratio of returns, almost 70 percent, led to changes in advertisement, with the result that the second part of the slogan was dropped.

In another example, Amazon.com oriented their entire corporate structure and corporate strategy towards costumers. Bezos, the CEO of Amazon.com, said: “We don’t make money when we sell things, we make money when we help people make purchase decisions.“

The top 5 businesses of consumer retailers in the U.S. and Canada, based on online sales are:

1. Amazon.com Inc. ($48,080,000,000)*
2. Staples Inc. ($10,600,000,000)
3.  Apple Inc. ($6,660,000,000)
4. Walmart.com ($4,90,000,000)
5. Dell Inc. ($4,609,728,000)                                       

* in brackets: sales of 2011