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Question: what do retail giants such as Amazon, online SMEs and even occasional eBayers have in common?
Answer: they wouldn’t exist without the world of ecommerce.
Who’d have thought that Mrs Snowball – a 72-year old grandmother from Gateshead – would’ve been the first person to kick-start the ecommerce revolution with an order of cornflakes, eggs and margarine! 30 years on, something which originated as a council-run initiative to help the elderly become more independent has grown so much that $1.221 trillion was spent worldwide on B2C ecommerce transactions last year alone.
But what exactly is ecommerce? In simple terms, ecommerce enables a consumer to purchase goods or services without setting foot in a store. Transactions can be completed online, via mobile apps, over email and now, even via social media. The ability to make purchases from home, work or pretty much anywhere, enables consumers to save time and money, as well as providing access to goods on an international scale. Cross-border shopping used to be difficult at best, but a recent UK survey found that among UK digital shoppers polled, nearly half had made a digital purchase with a retailer outside the UK.
Ten years after Mrs Snowball used her remote control to purchase her Tesco essentials, Amazon and Tesco launched their own online retailing systems, with eBay following just a year later, in 2005. While online retailers who have stores across the UK and internationally are gleefully riding the ecommerce wave (Amazon – $19.74bn, eBay – $4.4bn), they do face their own challenges. Back in August, when eBay crashed in Northern Europe, disgruntled buyers and sellers didn’t hesitate to vent their frustrations on the web even though the problem was not expressly the fault of eBay.
Aside from the benefit to consumers, the development of ecommerce in the past 20 years has had a significant impact on the marketing industry too. The online trail that is left when a customer purchases, or even browses the web has enabled digital marketers to create customer ‘profiles’ and provide more tailored marketing messages. Take direct marketing, for example, and a father who found out his daughter was pregnant due to smart customer profiling and direct marketing by US superstore, Target. In an opinion poll conducted by Accenture, the movers and shakers of the Marketing world said they felt that in the next five years digital marketing will account for 75 per cent of their marketing budgets.
The rapid growth of ecommerce was inevitably going to affect high-street retailers – but some more than others. HMV, for example, a British music retailer with almost 100 years of history, was practically run into the ground in the space of 20 years. In terms of whether or not ecommerce will completely take over in the next 20 years still remains unknown – although as I walked down Oxford Street last Saturday afternoon, I dare say that would be a no.
While ecommerce may be seen as an obstacle for retailers, it can also be something to embrace and use to their advantage. Taking near-field communications (NFC) as an example, retailers are now able to achieve two-way interactivity with their customers using online resources and data. For instance, Hong Kong carrier, SmarTone, has just rolled-out a Bluetooth marketing platform specifically designed for retailers.
While online retailers do provide a quick, easy and more accessible alternative to consumers, the feeling of parading down the high-street with a polythene bag makes you feel pretty great for some reason. I personally believe that if retailers can intertwine ecommerce and digital resources into consumers’ shopping experiences, they have the opportunity to reassert sales, while simultaneously pushing their brand ethos and identity.
Whatever direction ecommerce takes in the future, one thing that is for certain is that it is here to stay.