The digital age has made way for many new forms of information sharing and social collaboration. The growing e-commerce industry has proven to be a beneficiary of the digital age, growing to an impressive $1.5 trillion globally in 2014. Of course, this includes all e-commerce transactions, and not just the sale of products online. Nevertheless, the growing e-commerce industry is a great opportunity for retailers, and entrepreneurs alike.
The Mobile Opportunity
Global e-commerce will increase 18.6% year over year in 2016, to $1.888 trillion, with web sales accounting for 7.4% of total retail. The biggest opportunity in e-commerce is with mobile e-commerce. In 2015, Google reported that more than 50% of web-browsing was done on mobile devices, including smart phones and tablets. In 2015 U.S. mobile commerce sales will total $104.05 billion, up 38.7% from $75.03 billion in 2014. But mobile commerce in the U.S. isn’t growing nearly as fast as in other global regions. The combined sales of the 14 Asian retailers ranked in the 2016 Mobile 500 grew year over year 249.3 %, or 6.4 times faster than 378 ranked U.S. Mobile 500 merchants. In 2015 the 93 European Mobile 500 merchants also will grow their collective mobile sales, by 70.7% or 1.82 times faster than their U.S. counterparts, while the seven Latin American Mobile 500 retailers increased their total mobile commerce sales 59.6% or 1.54 times faster than the U.S. retailers.
The combination of increasing mobile device usage, and the comfort of being able to make secure purchases online is changing consumer purchase behavior. On top of that, mobile device capabilities are increasing, making them more valuable, and nearly replacing desktops and laptops as a main computing device.
The Generational Comfort Zone
Though e-commerce purchase decisions vary per generation, even Baby Boomers are turning to e-commerce as they become less able to move around. Baby Boomers’ biggest concern is with internet security, including credit card compromise and identity theft. Because the older generation is not as comfortable as other generations, they are slow to adopt the e-commerce behavior. Even with the hesitancy of this generation, the census bureau says that one in four mobile shoppers in the U.S. is over the age of 55. That said, baby-boomers are more likely to make an online purchase with Wal-Mart, Home Depot, Lowes, Costco, or other big-box retailers. You may be hard-pressed to find a Baby Boomer using bit-coin or Google Wallet to make a purchase online.
On the contrary, the Millennial generation is very comfortable with making purchases on mobile devices, tablets, laptops, desktops, you name it. They also are comfortable with making online purchases at small, independent web-companies, or on mobile games. Millennials are no stranger to the “cloud” and are even ok with storing their bank and credit card information in digital forms, such as Google Wallet, Android Pay, Samsung Pay, PayPal, Coin, and Startos. Because of the large number of Millennials, mobile commerce will only increase in the coming years. On a related note, Millennials tend to place a large emphasis on social influence when it comes to purchase behaviors. Something to keep in mind as you pick your marketing partner to hep you market your e-commerce website.
As the world of e-commerce grows, more retailers are finding themselves in the midst of the adaptation of omni-channel retailing. Omni-channel retail means the selling of goods and services across multiple channels. This includes the traditional storefront, a website, Google Store, Amazon Store, ebay, mobile app, wholesale, outside sales, among other retailing methods. In order to manage all of these channels, retailers need to have enterprise-like software that helps manage inventory, shipments, orders, and returns to all outlets. Though omni-channel retail has opened the door to new and more outlets for retailers, it presents many logistical challenges.
There are many 3rd party logistics companies and fulfillment centers that are capable of handling inventory management, shipping, orders, and returns across multiple outlets for a single retailer. And, they are able provide a single platform from which their customers can view and manage inventory, and create meaningful reports from which to make educated and informed business decisions.