E-Commerce Rise Means A Lift For Central Mass. Firms
Internet retail sales are at their highest point yet, according to federal data, and they’re projected to keep rising at a fast clip.
In the United States, e-commerce sales totaled $53.2 billion during the first quarter of this year, up 15.4 percent from the first quarter of 2011, and representing a new seasonally adjusted high of 4.9 percent of all retail sales.
The number has been growing steadily, and Internet marketing research firm comScore projects e-commerce sales to grow more than 60 percent by 2016.
It’s the kind of news that can conjure up thoughts of a few big web retailers like Amazon.com getting most of the consumer-spending pie, driving suffering local retailers to launch “buy local” campaigns.
Since the dawn of eBay and the ecommerce websites that followed, many brick-and-mortar businesses have taken a hit to their bottom lines, and some have gone out of business.
But for all of the companies who don’t love what the Internet has done to sales, there are also a number of companies in Central Massachusetts who earn their keep, or at least some of it, in the e-commerce eco-system. They range from those that enable the efficient flow of purchased goods to retailers that have simply decided to join the herd and sell products online.
Moving Product
Take Quiet Logistics, for example, the Boston-based warehousing and logistics provider that has a facility in Devens. Quiet Logistics is in the ecommerce fulfillment business, particularly in fashion apparel.
Its major clients include Bonobos, Gilt Groupe and Zara International.
The three-year-old company stores goods from manufacturers, receives and fills online orders and ships them from its warehouse, largely to consumers.
Al Deacon, the company’s vice president of sales, said it used to seem that consumers weren’t keen on purchasing clothing online. But that has changed, thanks to online retailers like Zappos, that have made returning online purchases simpler, he said.
The rising comfort level of consumers to purchase clothing online has meant growth for Quiet Logistics.
“Overall, the fashion and apparel space has been growing significantly in the e-commerce segment for sure,” Deacon said.
Sometimes it can be tough to distinguish between macroeconomic trends and an up-and-coming company’s growth, Deacon said. But whatever is causing it, the trend line has been up.
“A lot of our clients are growing year over year, and we get to grow right along with them,” he said.
Keeping The Money Flowing
Another company working behind the scenes is Westborough-based RedTail Solutions, which offers logistics software through the cloud for transactions between warehouses and retailers.
Bob Gleason, RedTail’s president and CEO, said his company feels just fine about climbing e-commerce sales. That’s because, to RedTail, all transactions translate to revenue.
“Either way it turns into a transaction to the supplier, either to supply a warehouse, or for example, in the case of Amazon, sometimes it’s a drop-ship request to a home,” Gleason said. “If the whole world went from [brick and mortar] to e-commerce, we’d still have basically the same amount of business.”
If consumers used to be reluctant to purchase clothing online, then they’re surely reluctant to purchase furniture through a website.
Online Showroom, Then Sales
That’s still the case, to an extent, said Steve Rotman, president of Rotmans Furniture and Carpet in Worcester. But Rotman said his family-owned business knows that could change in the future.
The store began selling furniture and other home products on its website less than two years ago.
Online sales still account for a small percentage of in-store sales, mirroring the national trend, but the number is growing.
“At some point, the sales on the web are going to increase. There’s no question about it,” Rotman said. “And we’re going to have to address that issue as it becomes more prominent.”
E-commerce has made life more convenient for many consumers, but Rotman has concerns about what it could mean for his business.
For one, no store wants to deal with too many return shipments on couches and other large items. And they may not comprehend the various color and fabric options available by simply browsing the website.
For now, the website is more of an introduction to the store, though that could change.
When customers call about something they saw online, Rotman or his staff will often advise them to come into the store to check it out. Like a vehicle, they understand that furniture is often a purchase the consumer needs to test drive.
“If it’s a big buy, they’ll probably come in to shop it,” he said. n
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