Online shopping is growing in T&T at a phenomenal rate. Several express courier service companies, which provide Internet shopping assistance and courier services out of the United States in T&T?via air freight confirmed this in interviews with the Business Guardian.
Most of these express courier services said they have experienced more than 100 per cent increase in online shopping sales from October into the Christmas season.
Some courier services said they expect this trend to spill over into the Carnival season.
There are several reasons for this growth. Much of it is fuelled mainly by special United States promotions, like Thanksgiving, Black Friday and Cyber Monday sales, heightened interest in credit card ownership, innovative items and their availability.
The growth of virtual shopping has created a platform and more room for companies to provide courier services.
According to Servisair T&T Ltd data, there are about 23 local companies providing express/SkyBox-type courier services.
Weekend bonanza shopping in the United States attracted more that 35 million people to retailers and Web sites for Thanksgiving-up from 29 million last year-and over 247 million shoppers for the Black Friday weekend, up form 226 million last year according to the National Retail Federation (NRF) Web site. It said the the average person spent US$172.42 online over the weekend, or approximately 40.7 of their total weekend spending, up from 37.8 per cent last year.
NRF said it asked shoppers which days they shopped online, more than one-quarter (27 per cent) of holiday shoppers said they shopped online on Thanksgiving Day, and nearly half (47.5 per cent) on Black Friday.
TrinCargo International
This phenomena is no different to T&T, said Chioke AJ Pierre, general manager of Woodbrook-based TrinCargo International: "We experienced more than 100 per cent online sales traffic for the Thanksgiving weekend."
Hesitant to divulge specific details for security reasons, Pierre said if the company was moving 2,000 pounds of cargo before Thanksgiving, it moved double that volume for the holiday. He said this is the same or even greater for the other regional and international countries they provide their services to. Trincargo provides both air and ocean fright services. This service started ten years ago and has been growing yearly.
Pierre said when the fear of recession hit, it did not affect this online shopping industry.
He said people are not afraid to spend their money, even though most people are going for the bargains.
Pierre said customers spend as much as $30,000 for two dresses for Christmas dinners and parties, and approximately US$10,000-US$29,000 for luxury items.
Hot sellers include electorinics- iPad, Kindle, cellphones, flat screen televisons, clothing and shoes.
He said even though the industry is growing, there is room for growth, saying that about 20 per cent of the population use this service. The banks, he said, are benefiting greatly form this service as many people use credit cards to buy online.
Caribbean Express
Raymon Brahim general manager of Caribbean Express, located at the corner of Cyrus Trace and Churchill Roosevelt Highway, El Socorro, San Juan, said the company has a customer base of about 12,000.
He said Caribbean Express' Christmas season starts mid-October. Like TrinCargo International, its business doubled for Thanksgiving weekend.
"From November last year to this year, we had an increase of about ten to 15 per cent in movement of courier packages due to online shopping and we expect sales to continue to improve."
Brahim said this overflow would continue into Carnival.
He explained that this industry now includes business people who are now using express courier services via air freight rather than ocean to bring in certain items.
"People shop online for Carnival shoes, mainly accessories, make-up, feathers and beads."
He said their sales usually slow down during the school vacation.
Caribbean Express, one of the older companies in the online shopping industry, began its service in 1994, offering ocean and air freight courier services.
Brahim said the banks are one of the reasons for this increase interest in Internet shopping.
"In the last ten years, there was an increase in credit card usage. Banks have been able to distribute more credit cards over the last few years. The banks are partnering with courier companies to offer a free SkyBox with the ownership of a credit card."
Benefits to shopping online
Lincoln Maharaj, the owner of Web Source Ltd, corner MI?Trace, El Socorro, San Juan, said online shopping is going to impact the world in a tremendous way.
"It is the easiest and fastest way to shop," he said. "An Internet shopper is an informed shopper."
Maharaj explained customers are able to get reviews from past shoppers to determine the quality of a product. They are also able to get detailed information about the product from the company selling it.
"It cuts down on time spent in traffic and for companies' inventory, pilferage, custom clearance and port delay. Some companies do not see it as a threat but an advantage, as they, too, are using the service."
Maharaj said even though his company is only two years old, he has been in the courier business for 18 years and Web Source has more than 16,000 customers.
Without giving actual numbers, Maharaj said, "In November, it was a landslide in our overall business compared to October, which was average, but we have tripled our figure since last year."
Web Source's financial manager Quincy Boodramsigh said its freight volume increased by between 20 and 30 per cent compared to last year.
Aeropost T&T
Like Pierre of Trincargo International, Gillian Rodriguez-Clarke, managing director of Aeropost T&T, said it has seen strong double-digit growth from 2011-2012.
"We do not see the population going through a recession because online shopping gives consumers choice, affordability, variety and convenience and that is why we continue to see this kind of growth."
Rodriguez-Clarke said the industry is becoming more competitive as several new courier-type companies have entered the market, providing similar services.
There is room for all.
She explained that Aeropost started off as a branch of another company ten years ago, but has been offering courier services exclusively seven years now and made its highest profit in 2012.
How do courier services operate?
Paul Pantin, director of E Zone Ltdm said SkyBox services started about 14 years, facilitating the delivery of magazines and mail only. T&T copied this service. It has now evolved over the last decade from mail and magazine delivery to household items, electronics, furniture.
Pantin said E Zone has stopped delivering magazines and now focuses on personal items, but this has also evolved into businesses that bring products for sale.
Similarly to E Zone, other express couriers provide customers with a shipping address in Miami and an account number where a customers' items are shipped to T&T and is delivered within three days.
With most express courier services, customers shop online at home and use the couriers' facility to ship their products. Customers could also have the courier company purchase the items for them.
Some courier companies have a Web site where customers can shop online or the company may provide a payment option only.
Others offer advice in terms of what may be the best option: buy online or locally.
In some instances, companies have a membership fee. Some have different charges.
Some companies charge by exact weight of the item meaning that if the item minus the package cost X amount that would be the cost, while some charge volume metric weight, which is inclusive of the pacakge.
Pantin explained that most of these companies evolve from offering ocean fright and have expanded their services, while some of the new ones may be new to the entire industry.
He said there is an international standard by which companies are guided.
Unlike other courier companies, Ezone offer it services from the United Kingdom as well.
He said it is not booming like the United States but customers bring in specialised items that they would not usually get from US like football apparel, pharmaceutical items, cap parts for European made cars like BMW and Audi.
Response from retail
Gregory Aboud, president of the Downtown Owners Merchant Association (DOMA), said Internet shopping has negatively impacted local retail shopping.
He agreed it has also open up new doors for SkyBox/Aeropost-type companies."
"Online shopping offers incredible convenience for customers to stay indoors in the safety of your own home and purchase items."
Spending a day shopping in T&T can take between three and six hours, maneouvering through traffic and public transport, Aboud said.
He said one has to consider the $500 wrecking fee for illegal parking which visitors to downtown Port-of-Spain face.
He said he can understand how Internet shopping might be poised to dominate local businesses that are not only employing people locally, but also providing an opportunity for people to launch new businesses.
"The phenomenon of Internet shopping is here to stay and local shops in town, cities and the malls have a significant economic challenge on their hands that requires a concerted effort of many different agencies in order to avoid the kind of drastic effect that is being currently experienced."
He said prior to the police wrecking vehicles in Port-of-Spain, businesses reported that sales were down by between eight and 15 per cent, but sales this December are the "slowest on record."
"While we are still grateful for the business we are doing, we are bewildered as to why the authorities have seen it fit to punish the capital city in the last weeks before Christmas," Aboud said.
Circuit Zone
David Beharry, sales manager of the San Juan branch of Circuit Zone Ltd, agreed that online shopping is affecting local retail stores.
"This trend has been affecting us for the past two years."
He said there has been a 30 per cent decline in sales from last year.
While he may not solely attribute his decline to Internet shopping, Beharry said it plays a significant part.
Another setback, he said, is Circuit Zone no longer stocks huge volumes, especially of expensive items, like televisions, the latest gaming consoles.
"We are not getting the kind of turnover we used to get."
Beharry said in order to compete, the store offers bundle packages where it tries to match offers on the Internet. For example, if a customer sees television and DVD special, Circuit Zone would offer the customer a television and another electronic item similarly-priced.
He said the electronics business is very challenging right now as several business, including hardwares, have popped up selling electronics and televisions.
"Another crucial factor is that retailers are competing against the same authorise resellers from which we buy our products," Beharry said. "We can go online and get the same items cheaper."
Jadoo Trading
Raj Jadoo, owner of Jadoo's Trading Ltd in Arima, said Internet shopping, while it has been around for a while, has affected the retail trade.
"At Christmas time especially, you would see a surge. I was speaking to some bank officials and they are also taken aback by this growing trend."
Jagdeo, however, doesn't agree that customers are really enjoying these online bargains. He said they are lured by the cheap price of the item, but don't consider charges for freight, duty and other charges the courier services have.
He said sales are more or less the same-not as good as he would like-but said customers are playing the waiting game.
"People are waiting for their backpay, bonus and December salary before they shop. As time go by, I hope it gets better."
Gamez Plus
Varuna Ramanrine, sales clerk at Gamez Plus at MovieTowne, Port-of-Spain, said, "Internet shopping has affected us, but not to a great extent. Sales have been pretty good. The new Wii U console is sold out already for the Christmas. The cost is about $3,800."
Ramnarine said people are careful with their money and are looking for bargains and special items of interest.
She said some of its items, especially games for different electronic consoles, are priced to match what's available online, so Gamez Plus is competitive.
Pros and cons
Over the years the Internet has become a great source for bargain hunters for good reason. There are many great buys online, price comparison companies that help us drill down to the best prices, shipping and tax advantages, and the convenience of not having to leave home.
Sometimes, however, the deal that looks great falls short of what has been advertised.
Communicating dissatisfaction can be difficult online versus face-to-face and often takes enormous patience and tenacity to achieve satisfaction.
Advantages of shopping online:
• The stores are never closed.
• There is no dress code.
• You save on gas.
• There are no parking woes.
• You can escape from aggressive salespeople.
• There are vast resources for product and price comparisons.
• Products can be found that are not available locally.
Disadvantages:
• The inabilities to physically check out the items you are purchasing.
• Losing the power to negotiate the price and payment terms that may exist in local stores.
• Items ordered online are sometimes on backorder but the consumer is not always informed until weeks after the purchase is made.
• Not always knowing if a site is a legitimate and safe site to shop.
• Having to pay for shipping costs that far exceed the true shipping rate.
• Returns and exchanges can sometimes be difficult because of the lack of face to face negotiations.
• Restocking and shipping costs are often charged on returns made online.
When shopping online:
Pros: Many companies online provide excellent values because they do not have to pay the overhead of owning a physical business that will cost them insurance, employee pay, taxes and more.
Consumers can benefit from the savings of online shopping, especially when they combine it with special promotional coupons, and other consumer incentives.
Cons: Companies offering free items online sometimes hike up the cost of shipping so high that they profit from the purchase.
One example of this is the free software products that are advertised. You may get three free software CDs but the $14.95 shipping cost exceeds the real value of the products.
The trick to getting a good value on products you purchase online is to look at the entire purchase amount and not just the amount that you will be paying for a specific product. (about.com)