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Good News for eCommerce

posted on May 15, 2007


Two items of good news for eCommerce in the last few days:

Friday, Accenture reported that most product research (69%) and comparison shopping (68%) happens online. Actual purchases, however, happen offline (67%). 13% said the Internet played no role in their offline shopping. The study backs up last year’s comScore stat that stated that 63% of search-related purchases happen offline.

The Kelsey Group adds that for purchases over $500, more than 90% happen offline.

Search Engine Watch says that this offers an opportunity for local product search to step up.

There wasn’t any indication of shoppers’ reasons for buying in person. These could range from “I wanted it now” to “I didn’t want to pay shipping costs” to “I wanted to try it on/out first.”

Today, Reuters reports that “online retail is years away from saturation.” They relied on Forrester Research’s . . . research which stated that eCommerce should experience double digit growth for years to come.

Last year, the online retail industry boomed 25% over 2005 (to $220 billion). For the first time, clothing was the most popular industry in online sales, passing the perennial favorite, computer hardware & software. (This is excluding travel, of course.)

According to the US Census Bureau, eCommerce last year accounted for 2.5% of all US spending, while Reuters said that it was 7%. Either way, it’s not a very difficult position to grow from. Or, to put it another way, no place to go but up.

Looks like the moral of the story is that it’s never too late to break into eCommerce. The Reuters piece says that only 1% of food and beverage purchases take place online—maybe start there ;) . However, if you’re thinking of running and online-only eCommerce business, consider the reasons why two-thirds convert offline, and look for innovative ways to combat those excuses.


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  • http://organizational-tips.fremont-online.com Dana Mark

    Thank you for the encouragement. I read differing opinions on the future of eCommerce. Your report gives us hope!

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  • http://web2.0stores.com eCopt

    More reason to find that special niche! Specialty products that can ONLY be purchased online are a great way to make eCommerce work online only.

    The hardest part is finding something that is untapped, or improving something that already exists.

    I think the reports are right on and that brick and mortars certainly have a reason to expand online. If a consumer can go right to the store’s site and then drive down and pick up the item you can’t go wrong, especially if you offer a great product.

    eRetailers that can do both (offer a specialty product and have an actual storefront) have that much more of a chance for success!

  • Rebecca

    What was the good news? The fact that eCommerce is still such a small percentage (2 or 7%, doesn’t matter) of retail or the fact that 67% percent still buy offline. Give us the REALLY good news – what is considered an amazing conversion rate, what’s normal and what’s abysmal?

    My opinion – eCommerce vendors have a long way to go to improve customer service, they need to lower or drop shipping fees (on top of tax why wouldn’t I go to the store?), and last but not least, improve the overall shopping experience (for instance how annoying is it when you can’t zoom in on something). So maybe that’s what the good news is – all the things that still need to be fixed.

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