E-commerce Drives Future Retail Sales
As more consumers are choosing to shop online instead of at brick and mortar stores, e-commerce, or online shopping, is driving sales at retail establishments. The three most common types of e-commerce are B2B (business to business), B2C (business to customer) and C2C (customer to customer). Current statistics show that approximately forty percent of internet users have bought products or goods online using their desktop, smart phone, tablet or other online device. This is more than one billion people, consumers and businesses, shopping online with the projections expected to grow each year.
Why Is E-commerce So Popular?
Gone are the days when you have to drive to your favorite store to pick up your favorite item. Now, shopping for whatever you need is as easy as a few clicks. New industries to enter the market are grocery stores and auto sellers. If you know what products you want to purchase, you can shop, pay for them on the grocer’s website and many will bring them to your car. It is predicted that 20% of grocery sales will be generated online by 2025. Currently, close to five percent of United States consumers prefer shopping for their groceries online. Auto sellers have also discovered that some shoppers don’t need to walk along miles of options to make a choice. Some websites are allowing you to pick out your car, file your application for financing and have the car delivered to your doorstep without ever seeing the car or interacting with a car salesman.
What’s Happening in the Stores?
Nearly one third of US-based shoppers see shopping in a traditional store as a chore versus an engaging experience. Part of the reason they feel disillusion is in the difference between their online experience and what they often find in the traditional stores. When shopping online, many consumers enjoy being able to compare prices and products at several retailers before deciding, however, in the store you are limited to what is in front of you. This is hard for physical stores to overcome because many cannot afford to diversify their inventory when they are not seeing the necessary spikes in sales to justify the increase.
How High Will E-commerce Sales Go?
The convenience of e-commerce options across industries has professionals predicting that worldwide retail e-commerce sales will exceed $4 trillion by 2020. This is predicted to account for almost 15% of total retail spending for that year. Although these projections have been lowered due to low oil prices and negative currency effects, they still show the power of the computer in buying decisions. Many of these purchases are made independent of any sales assistance which leaves the consumer to interpret the benefits and advantages of the products for themselves.
How Will This Affect Advertisers?
As many businesses are determining where to spend advertising dollars, online sites, ad words and pop up banners are becoming more and more attractive. Understanding the short attention span of the average consumers, advertising executives know that you must create a compelling call to action that will result in the consumer making an immediate decision.
Unfortunately, this will probably result in more emails arriving in your email inbox. On average, most major retailers are sending at least one email per day. However, as the propensity to shop online increases, so will their attempts to communicate. Some retailers are encouraging the download of their mobile app so that they can communicate with you directly through your smartphone. Others are asking to enable desktop notifications from your computer to allow pop-ups of special offers.
Protecting Against Fraud
As online shopping increases, so will online fraud attempts. During the 2016 holiday season, online fraud attempts increased by almost 31% from the previous year. It is estimated that one in every 97 online transactions was a fraudulent attempt. Researchers show that the highest rates of fraud occurred during the holiday season. However, online shoppers should be careful all year round and pay close attention to transactions on debit card and credit card statements to report unusual transactions as soon as possible. Many banks that issue cards also have a fraud detection department to analyze purchases that might seem unusual in your account.
E-commerce will drive retail sales into the future as more and more shoppers opt to purchase everyday items as well as big ticket products from the comfort of their homes. Consumers and retailers will need to guard personal information to protect against fraud attempts, however this is not likely to deter spending nor will it decrease the frequency in which retailers will pursue potential buyers with advertising.