Ecommerce websites have come a long way since it was confined to transactions between large companies. Now, it includes purchases made over the internet and transactions between peers. The proliferation of mobile devices and the burgeoning popularity of social media have only encouraged it, and retailing has been revolutionised. This sector has surely recovered from the 2008/9 recession. Facebook’s recent offering of shares was something of a damp squib, but the sector continues to have extremely strong prospects. Forrester Research reported that, in the United States, e-commerce grew by 12.6 percent to $176bn and was expected to grow another 60 percent to $279bn by 2015.
The number of consumers conducting their shopping online is growing as unemployment and transportation costs rise, internet connection speed improves and e-retailers provide ever more incentives such as free shipping. Tablet computers and smartphones are the most oft-requested items. Books, video, music and games are increasingly moving online. Amazon and eBay are the dominant online retailers while Netflix is firmly-entrenched in the realm of film delivery. Groupon issues coupons for local stores which have a short lifetime and intends to go public. Airline tickets and hotel reservations booked online are growing markedly and more so in China, Russia, India, Brazil and South Korea, with online travel companies such as Expedia, Priceline.com and Orbitz Worldwide the principal beneficiaries.
Online advertising is growing strongly to take advantage of the increased number of people whiling away their hours with the internet. EMarketer forecast that online advertising spending would increase by more than 20 percent. Shares in search engine providers such as Google, Yahoo! and Microsoft are seen as a sound investment.
Retailers are turning their attention from core systems to customer-facing applications. Ivano Ortis, the research director of IDC Retail Insights, said that spending on infrastructure had fallen from 80 percent of IT spending to 60 percent. The head of IT at Marks & Spencer, Pete Mitchley-Hughes, said his company was concentrating more on its website, which was previously run by Amazon but is now managed in-house to allow for flexibility and independence. He also said that mobile technology was a “massive growth area” for M&S, and keeping up was a tremendous challenge. He added that many organisations were consolidating their systems.
One key area of improvement is top ecommerce software to enable customers to browse products in-store, even in local express shops. Mark Jeffers, Tesco.com’s international development manager, said that instead of large projects, releases were now made on a monthly basis, which he described as a huge shift.
It is clearly apparent that e-commerce is seen as the hottest of areas in venture capital.
I think we only need to look at the growth of Amazon to see how profound this shift is. Even brick and mortar stores like Walmart and Costco are expanding their online offerings. In fact, this year I bought more from Costco online than in their stores…