Ecommerce
Facts vs. Fiction
Normally, our Mosaica articles are written to help educate our clients to be more successful (profitable) online Sellers. However, we also understand that occasionally we all need a bit of “lighter fare,” mixed in with a steady diet of “meat and potatoes.” For that reason, we thought we would provide an article this week that while still interesting and educational……was also a bit more entertaining.
Let’s start with a question that the vast majority of online Sellers (and buyers) are always surprised by the answer to. What year did true ecommerce first start on the World Wide Web? If you answered sometime in the mid to late 1980’s…..you would be off by more than a decade! That’s write, 1971 is the correct answer. It is hard to believe that ecommerce actually launched 45 years ago. If you think about it that means that anyone born in the 1980’s has never really known a world that did not offer online consumer products or services. It kind of puts things in a proper perspective to say the least.
Mae Erne has compiled a list of little known facts and trends about ecommerce that will no doubt catch you off guard. However, they may also provide you some insight as to what future trends may be as well that online Sellers may need to consider.
“Top 7 Interesting Ecommerce Facts or Trends”
- The first ever ecommerce product offered by a major company was a food! Many people are surprised to learn that it was not an e-book or an article of clothing or some other durable good. In fact, it was Pizza Hut pizza. This was a very risky addition at the time to their marketing model. However, it led the way for all other ecommerce to follow. The Lesson: Just because it has not been tried before doesn’t mean you shouldn’t give it a shot.
- How many years was Amazon in business before it posted a profit? Amazon launched in 1995. They posted their first profit in 2003! Despite having revenues of $1.6 Billion in 1999, Amazon still managed to lose $719 Million that year. It was nine years before Amazon was able to turn a profit……which was seven years after going public. Jeff Bezos was able to get things under control only after laying off one-seventh of Amazon’s work force and closing some distribution centers. The Lesson: Even companies considered the “Standard of their Industry,” go through growing pains and difficult times. Don’t give up and be prepared to make tough decisions.
- By 2016 over 80% of the online population will have used the internet to make a purchase and over 50% of the online population will have purchased online multiple times. What else is there to say? Ecommerce is the present and future of retail sales. The Lesson: Get on board that ecommerce train and hang on for the ride. It may be bumpy from time to time…..but it is the economic engine of the future.
- Of the nine major ecommerce product categories sold today, apparel and accessories is the fastest growing of all of them! This trend is driven not just by major multi-national conglomerates but also by small and medium sized businesses that work out of small shops. If you can make it and it appeals to the consumer……ecommerce is your golden ticket. The Lesson: While you should always make and sell what you are good at….maybe your company should get good at apparel and/or accessories!
- Mobile “Point of Sale” Devices are one of the major growth tools large retailers are now embracing. At the end of the first quarter of 2015, JC Penney’s reported that fully one-quarter of all of in-store sales were originating through mobile point-of-sale devices. One year later, that number was closer to 36%! The Lesson: When you build a software application for your company or products…..do not ignore the mobile device application options available to you. You are not saving one penny by NOT incorporating mobile devices into your application model.
- The number one option requested by ecommerce consumers to augment their online shopping experience is a “tracking option” for their deliveries. Online shopper’s value convenience during the actual buying process, but during the post-sales process, fully 79% of those shoppers desire automatic tracking updates of their purchase. 65% of those shoppers prefer e-mail or text alerts as the most preferable manner to receive those tracking updates. The Lesson: The quickest way to degrade your customer service ratings is to NOT offer automatic tracking of your customer’s purchases. This is their number one concern after they buy!
- Asia holds the largest number of web purchases geographically, with South Korea at the top of that list. The South Korean ecommerce market has grown into one of the most developed in the world. Fully 7 of 10 inhabitants in that country have made an online purchase! Between South Korea and Japan, they are truly the ecommerce “Gateway to the Orient.” The Lesson: Educate yourself on what appeals to Asian consumers. It will be worth the homework. Remember, many Asian customers in the US, Canada and Europe have extended family in those markets so you may not have to ship directly to that side of the world.
“A Few Good Trends……”
Ecommerce research has shown that online Buyers are now getting used to several trends that are becoming more common in the marketplace. If you are offering or following these services or trends, then you are ahead of the game. If you are not…..then this may explain why you are slipping behind your competitors.
- Promotions and Giveaways. More Sellers are offering promotions and free giveaways than ever before. Back in the 1960’s it was common to see gas stations giving away everything from toys to china just for buying fuel from them. In the 1970’s fast-food chains began giving away toys and other items for buying kids meals. Once those trends became ingrained into the psyche of consumers (and marketing executives) these promotions/ giveaways became expected by the consumer. Case in point, no one shops for groceries today without targeting BOGO’s! You can either fight that trend or you can somewhat embrace it. Just remember that “trends” eventually become standard operating practices……for those companies still in business.
- New Products or Upgraded Versions are the expected norm. If your company builds the world’s best “widget,” and nothing comes close to its value, performance and price…..don’t sit on your laurels. You had better introduce new colors or options at least every other year and at minimum you might consider a new improved version or next generation every three years! Even if your product upgrades are mostly marketing hype because you can’t improve on perfection…..the consumer believes since everything else we buy and use is improved upon every 14 months…….your product should be no different. Don’t disappoint them. They are expecting this to take place. At minimum, develop new options for your standard product. While your older, loyal customers may not require such generational updates, just remember, they are getting older and will someday be gone……don’t let your business die with them.
- Educate your customer about new uses for your products. If you receive an email from a customer who had discovered a new amazing use for your product…..don’t hide that fact. Post it on your social media applications at minimum. Remember, word of mouth from loyal and satisfied customers is 33% more likely to drive new business to your company than any other single marketing effort. Don’t waste that input from the field. If you have to, reward it! Just don’t ignore it!
Well there you have it. We tried to provide you some tasty tidbits for your critical thinking pallet…..and at the same time slip a few green vegetables onto your plate to keep you healthy, just like your parents used to do. At minimum, try and anticipate what other trends may be just around the ecommerce corner. Remember, it’s a lot more fun and profitable to be at the beginning of a positive trend than at the end of one!
