I posted this article below to my LinkedIn account Hunter Hartman LinkedIn . I want to make sure that I am bringing value to my readers here on the blog. As an eCommerce Shipping Consultant it is important to be able to bring content on what is going on in the industry. eCommerce is a constantly changing beast. You will think you have it figured out and then you will have another issue with technology, small parcel carrier or the ability to make money with the way the business is changing. This is why I think it is important to always stay on top of the industry and learning as much as possible.
For those of us that remember video cassettes, life before streaming content online and Amazon Prime's two day shipping, it may be hard to consider how far the eCommerce world has come. Remember when Sports Authority and Sports Chalet were running the sports industry? Or when Office Max and Office Depot was the go to place to get stationary, paper and ink cartridges? Well, those days are gone and new days will continue to evolve. By 2019, the domestic eCommerce market could grow to as much as $535 billion. This is up from $330 billion last year in 2015. Meaning, with Sports Chalet going out of business and Sports Authority going into bankruptcy in recent months, this all happened with the eCommerce market at $330 billion. What is going to happen when this market goes to north of a trillion dollars That is a scary thought!
Sports Authority was once titled as America's largest sporting-goods chain. It is now in bankruptcy with $1.1 billion in debt and declining sales, largely due to eCommerce. People are still buying plenty of sporting equipment, but they are buying it online and paying less without the middle man involved. Sports Chalet, a regional sporting store located in Nevada, California and Arizona announced last weekend it will be closing all of it's forty seven stores. This business has to go somewhere, the question is where?
The issue lies in the fact that internet sales have increased competition amongst the big brick and mortar retailers that have significantly higher overhead costs. The other advantage to online companies is some of their out of state customers do not have to pay sales tax on their purchases if they do not have a presence in the others state. Back in 2009, the estimate of 10 percent of all sporting good purchases were made online according to the National Sporting Goods Association. Five years later in 2014, the number jumped to a 14 percent. Another issue that is hitting brick and mortars hard is customers are taking advantage of seeing and trying the product in their show room and then going home and purchasing it online at a cheaper price. (This is something that hurt Borders and is now hurting Barnes and Noble in the book arena.) People are still buying sporting equipment. In 2003, total spending was $45.8 billion but that rose to over $63 billion in 2014.
What do we learn from Sports Authority and Sports Chalet? The industry is going to continue to change and online presence will continue to eat at the margins and revenue until we see a drastic innovation from the brick and mortars.
Information regarding this post comes from The Press Enterprise "Who fills the gap by Sports Chalet?"
Hunter Hartman is an eCommerce consultant for Move Method and is based in Ladera Ranch, CA. His focus is on small-to-large eCommerce companies that are shipping business-to-consumer. Through his shipping expertise he has helped hundreds of companies save money shipping small parcels and helped to integrate a more automated solution. For more information and a free consultation, please visit us at www.MoveMethod.com.
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Hunter Hartman is a shipping consultant in the eCommerce world. He blogs about the changing landscape of shipping.