Clicks not Bricks
December 29, 2014
By Jerry Smith
The largest funds raised by a public offering of stock in 2014 was an e-commerce company. By now, most people have heard of this company, Alibaba, and its name may soon reach the same recognition enjoyed by Amazon.
One is a very unique consumer if they did not buy any goods, products or services on-line in 2014. In fact, over 4.1 billion consumers from around the world used the internet and at least 25% bought something using this method of purchasing. The global growth for on-line sales exceeded 23.6% with the highest growth rate occurring in the Asia-Pacific region at a staggering rate of 45%. It is expected the worldwide B2C (Business to Consumers) on-line sales will approximate $1.7 trillion in 2014. Yes, that is trillion!
Here are the top five countries in e-commerce purchases in U.S. dollars (billions) during 2013:
- United States 418
- China 328
- UK 142
- Japan 136
- Germany 84
No doubt, China will surpass the U.S. in 2014. Cross-border sales are pre-dominant in Europe where 30% of the world’s e-commerce was derived from its aggregate countries.
The statistics of e-commerce sales are interesting, but it is only part of the story. These numbers tell us that there has been a dramatic change in the buying habits of consumers in most countries. Everything from next day delivery (or even same day delivery) coupled with the buzz about drone deliveries has captured the buying public’s interest as speedier and more hassle-free buying is offered.
Web sites that are easier to navigate, guaranteed secure payment methods, easy return policies and larger selections opens up channels of distribution not realizable 10 years ago. Add to this the ability of small to medium size manufacturers to expand their customer base makes for a game changing phenomena in consumerism. Even small craft makers can find a place for their products on Etsy or eBay.
There may be a tendency to think primarily of Amazon, eBay and Alibaba when you envision e-commerce sites, but behemoths such as Wal-Mart and Target are not to be minimized. It is believed that Wal-Mart has more e-commerce sales in Brazil than any other e-retailer.
What’s next? Expansion of predictable purchases metrics (using the buying habits of consumers to predict their next purchase to make sure the inventory is readily available) will be one area of using analytics to improve the supply chain. Also, continued development of more sophisticated analytical software that targets consumer purchasing patterns and interests will allow for more effective marketing and advertising. Not to be overlooked is the building of larger fulfillment centers with an increase in the use of robotics to pick, pack and ship. Other novel ideas include one of the major UK delivery companies having trucks with on-line purchases available at the commuter stations for pick-up as the traveler goes home.
On-line sales may never take the place of the shopping mall, but the trend of buying a product while in your PJ’s having a cup of coffee is surely eroding revenues of bricks and mortar stores.
Jerry Smith is the founder of an e-commerce site in Europe that sells exclusively Made in USA products: www.WishBoxUSA.co.uk
For comments and further information his email address is: [email protected]
