Retail store closures could break a 20-year record, even as Amazon and other once pure-play e-commerce companies open brick-and-mortar locations, according to Kleiner Perkins Caulfield & Byers General Partner Mary Meeker’s widely anticipated trends report, which she unveiled Wednesday at Recode and Vox Media’s Code Conference. Meeker estimates retail closures will near 7,000 this year alone.
Meeker also reported that Amazon is also becoming a key supplier of household basics batteries and baby wipes, with the e-commerce giant outselling Duracell, Energizer and Panasonic and just third behind baby-goods giants Pampers and Huggies. Amazon enjoys more than 30% market share in batteries and more than 15% market share in baby wipes. She also noted Wal-Mart’s aggressive online push, including its acquisition of Jet and smaller online retailers like ModCloth and Moosejaw.
Some of the most innovative direct-to-consumer retailers, particularly in pet care, footwear and beauty, are targeting customers with content and a narrow selection of products, which Meeker highlighted as “innovative product + simple selection (less selection) = more." In all, year-over-year e-commerce growth is exceeding 15% this year, she said.
Technology is a firmly established driver of commerce and marketing, making Mary Meeker’s report essential viewing for retailers, regardless of sales channel. While e-commerce continues its runaway growth, it’s clear that technology, from the employment of data to the gamification of marketing, has seeped into retail fundamentals and has implications well beyond online sales.
Wal-Mart has improved its e-commerce game with acquisitions, starting with the $3 billion buyout of Jet last year, and has swiftly improved online sales. But that doesn't address Amazon's incursion into private label consumer goods in categories like batteries and baby wipes or how Amazon and smaller retailers use data to reach customers and develop merchandising strategies.
Data is also transforming marketing — giving marketers new data-based options via Google and Facebook and allowing them to more easily gauge their effectiveness, but also making it much easier for consumers to block advertising that doesn't appeal or outright repels them.
Ad blocking is on the rise, especially for mobile with such apps on some 400 million mobile devices. Meeker’s report also noted that 68% users prefer ads to contain incentives (and a majority also prefer they be skippable) and 54% are hating on pop-ups. Geo-targeted ads from Google are driving foot traffic to stores, according to one slide, and contextual ads are driving direct buys on Facebook with 26% of Facebook users who clicked ads in March making a purchase, according to another.
For Meeker’s full slide show, click here.