Ch.4 Revenues

http://www.ctv.ca/generic/generated/static/business/article1466595.html
Summary
Sears Canada Inc is one of the leaderships in e-commerce and with the pressure from other online sites, they need to continue upgrading their services on the net. They are focusing on updates with their new products and interactive features on their websites. They are also betting heavily on e-commerce to boost their bricks and mortar department sales. In their report, Sears’ overall revenue decreased but online sales have jumped 18% from previous year. Cyber sales make up less than 10% of Sears’ $5.7 billion revenue in 2005. Sears is also expecting a 9% rise, $11.3 billion US in 2010. They are seeing the trend in online behaviour by chasing younger consumers’ desires. Sears is rapidly introducing new products that can attract young consumers, like sports collectibles and eco-clothing. The e-commerce has become one of the important factors in Sears. E-commerce team has doubled to 80 employees from previous year and plans to reach 100 by year’s end.

Connection
The textbook contains an article about on-line shopper survey and it makes the highest revenue from all industries. E-commerce is the buying and selling of goods or services on the internet. In the article, Sears showed that e-commerce is one of the most important factors contributing the company’s revenue. Compared to 2005 Sears’ revenue, the revenue they estimated for 2010 has doubled. The confidence in the rise of the revenue is from the online consumers. Sears don’t need to worry about carry the risk of stocking revenue because suppliers can hold on to the merchandise until it is purchased. This means Sear’s online sales recognize revenue at the time of sale. Once the consumer has paid online, Sears will send the product to customer and recognize the revenue. The textbook also states that returns through Internet are an issue because it may be harder to estimate the probable extent of returns. On the Sears’ website for online shopping, the return policy for purchasing on Sears Outlet website is within 10 days and items purchased on Sears.ca are refunded within 30 days. Sears has made the return policy really clear. The days for allowing returns are similar to going in stores purchases’ return policy. This helps to estimate the probable extent of returns. It may be hard at the beginning to estimate online sales but Sears has been running e-commerce for several years. They have quite an understanding of online behaviour for their sales and return.

Reflection
I think Sears made a good choice of focusing on their e-commerce. As we can see, technology is always in used in our daily lives. Many people now a days prefer to do everything online because it is more convenient. E-commerce helps Sears increase their revenues and reduce the chance of having too much stock inventory. In the future, my prediction is shops would decrease and online businesses would increase. Many people like the idea of doing online sales because it helps them reduce their expense. For example, they don’t need to hire as much workers. The cost of starting a business online is lesser than starting a business in a real store. To me, I think Sears would have the chance of reducing their stores in Canada and focus more on the online market.