Trends in E-Commerce

E-Commerce is “the buying and selling of products or services over electronic systems such as the Internet and other computer networks”

• E-tailing
• E-marketing
• E-business transaction

The growing importance of e-commerce for business  

• Currently there are 1,668,870,408 internet users in the world (1.67 billion; total world population 6.9 billion) (Internet World Stats)
• US e-commerce sales in 2008 approx $204billion (Forrester State of Retailing Online 2008)
• UK e-commerce sales in 2008 approx £59billion  (Xorte)
• UK B2C e-commerce growing 17% in 2009  (Global B2C Ecommerce Report)
• Top 500 retailers posted 2008 growth of 20.7% in e-commerce
• Web-only channels are fastest growing e-commerce channels
• Recession not unduly affecting e-commerce growth

Why the change in customer behaviour?

• Increasing pressure on time 
• consumers are wanting to co-design and customise their products 
• consumers are empowered and have high expectations
• consumption can be accessed globally
• consumers are driven by interests rather than necessity 

The effectiveness of websites for e-commerce

• Valuable for conveying information in a similar fashion to direct mail activities;
• More cost effective in terms of reaching the target market than traditional methods such as direct mail;
• A rational rather than emotional medium
• Effective in precipitating action;
• Effective for both long and short term promotions;
• Not effective in grabbing attention*; and
• Less effective in changing attitudes*

Online business models for e-commerce

• Advertising - Primary income source, simple & easy
• Subscriptions - Set fees for Internet access
• Pay per use - Users pay for individual information, complex
• Hybrids - Combination of business models

The perceived risks of e-commerce and how to manage the risks

• Time risk - consumers can waste time searching for product - make sure navigation of your website is easy and includes a search function.
• Vendor risk - the site may be a scam - make sure you are transparent with your customers.
• Security risk - concerning credit card numbers - make sure your website has security verfication and is known to your customers.
• Brand risk - the website of the brand they are buying from has problems - make sure the website is functioning properly before you launch it.
• Privacy risk - concern of abuse of personal information - make sure you register and apply to data protection standards.

Future trends in e-commerce that you need to take into account

• There is an increasing reliance on web-based systems
• There is an increasing importance of social web for product evaluation e.g. Tripadvisor
• There is greater price parity e.g. price comparison websites
• There is increasing importance on real time web for financial markets
• There is likely to be an increase in distribution problems for physical goods

 Issues you will need to consider in the future

• Gaining global access to technology infrastructure
• The reliability of technology
• Technology literacies
• The continuing change in consumer behaviour
• Consumers are becoming more creative and selective
• Consumers are also becoming sellers e.g. ebay shops
• The specifications of the product will be more important than marketing
• What people say about prodocuts is now becoming more important than brands

Expert advice by Joanne Jacobs, Social Media Expert Consultant

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