Breaking the E-Commerce Sound Barrier with Matrix Retail!



What was that noise?

Someone just broke the e-commerce sound barrier!

In the third quarter of 2014 Williams-Sonoma’s e-commerce sales represented 51.5% ($587 million) of total company sales overtaking their store sales ($566 million) for the first time!

Even more importantly this increase is not due to offsetting reductions in store sales with the $566 million in store sales representing an increase of 4.8% year over year for the quarter.


Indeed Williams-Sonoma are now helping to define a new retail formula, where the sum of e-commerce and in-store sales is greater than the parts, generating competitive advantage for even a 58 year old retailer. This phenomena is something I’m now calling ‘ Matrix Retail ‘.

On their recent earnings call, Williams-Sonoma CEO Laura Alber told Wall Street analysts.

‘There’s no question the holiday season will be even more competitive than last year, but I also believe e-commerce will set a new sales record and with over 50% of our revenue in e-commerce we have a competitive advantage.’

Continuing, Alber further advised analysts.

‘Our marketing drives traffic to all of our channels and our in-store experiences and services give our customers the confidence to order online.’

The success demonstrated by Williams-Sonoma in the third quarter represents an excellent example of emerging Matrix Commerce or more specifically in this case Matrix Retail.

By providing a co-ordinated, consistent and customer centric approach across all channels to deliver superior customer experience, Matrix Retail players can significantly outperform any pureplay e-tail or traditional bricks and mortar retail competitor.

Further demonstration of the emerging Matrix Retail effect also comes from observing pureplay e-tailers and the numerous cases in 2014 of dramatic sales increases experienced on skus sold both online and in pop-up stores.

A number of these interesting cases are discussed in Hollie Shaw’s recent article: ‘Digital retail heads back to the future with old-fashioned stores’ citing plans and examples from leading e-tailers such as Amazon, Warby Parker and Frank & Oak.

For those still seeking additional support for this, Open Realty Advisors published ‘E-tailers Make Major Brick-and-Mortar Play’ in March 2014 citing several additional examples including Bonobos, Baublebar and Google

Doug Stephens, founder of Toronto-based advisory firm Retail Prophet is quoted as saying.

‘It’s not that online is winning and bricks and mortar is losing, it’s that a new form of retail is being born. I think Amazon is trying to figure it out as much as Macy’s is trying to figure it out.’

I couldn’t agree with Doug more, and today I’m coining the term ‘Matrix Retail’ to describe the positively magnifying effect utilizing a ‘Matrix Commerce’ approach when combining digital and real world retail environments and experiences into a new hybrid omni-channel business model can deliver.

Earlier in 2014 sales increases of over 300% for skus featured both online and in new storefronts were being reported.

In explaining his view of this phenomena, Neil Blumenthal the CEO of Warby Parker said.

‘When we think about what we do, we’re not just eyewear designers; we design experience. We’re medium agnostic — we just want you to have whichever medium you prefer to shop with us at. That’s what we’re going to provide, whether in-store or online, and we design these experiences holistically.’

So welcome to the new world of ‘Matrix Retail’, stay tuned for more on this evolving phenomena and until then as a first step here’s a question for you.

Can you project how long it will be until your online retail sales break the e-commerce sound barrier?


Jeff Ashcroft

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