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Ecommerce turns 20 and my, how it’s grown

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Happy birthday ecommerce! We’ve now been able to shop online for twenty years. That’s how long it is since Sting album the Ten Summoner’s Tales was bought in what’s widely regarded as being the first secure online purchase. At the time, the album changed hands for $12.48 plus shipping on NetMarket. Today it’s available for £4.46, plus shipping, on Amazon, and can be streamed for free on Spotify. So what else has changed since that first transaction on August 11 1994?

The popularity of online shopping

This year the industry is likely to pass the £100bn turnover milestone in the UK, having turned over £91bn in 2013, according to IMRG figures.

ONS figures out last week found that 74% of all British adults have bought goods or services online.

As to why, Roger Brown, chief executive of personalisation specialist Peerius said: “Ecommerce and mobile technology have empowered consumers as they are no longer restricted to particular goods and services from one retailers or locality as they can shop around different brands and even in different countries at their convenience.”

It’s not online vs store, it’s online + store

For years online appeared to be developing as an alternative to the high street. But more recently, consumers have started to take online into the store, using mobile devices there to check prices, availability and other factors. So-called showrooming got an initial frosty reception from retailers. Since then, however, it’s become clear that helping customers to get the information they need in store makes them more likely to buy. Retailers have responded by enabling shoppers to access information from their stores, whether that’s by offering free wi-fi, enabling them to shop a wider range than the store can offer using in-store kiosks or iPads, or using the store as a collection point for online orders.

“Many high street retailers continue to thrive and understand how online shopping can complement in-store shopping and not compete,” said Peerius’ Brown. “Ultimately online is a digital store and is working towards the same business goals – to deliver an engaging shopping experience and drive sales. The mass adoption of mobile devices is forcing retailers to adapt rapidly to changing consumer behaviour and recent stats from IMRG also reveal that multichannel retailers are outperforming online-only retailers on mobile devices.”

The rise of m-commerce

While ecommerce has grown hugely in recent years, IMRG figures out as long ago as last September suggested mobile was already the main driver of growth. Smartphones and tablet computers, unimagined back in 1994, are growing in uptake, with a knock-on rise in popularity as devices for browsing and buying online.

As retailers have seen their traffic from mobile rise to more than 50%, they have responded by designing first for mobile, using responsive sites that can adapt depending on which viewing device is used. The industry is set to react quickly as 21st century technology develops, and already many will be studying how retailers can best serve customers through emerging mobile devices such as Google Glass, only recently available in the UK.

Customer expectations

Remember when taking a pair of shoes back to the shop was likely to be met with a disdainful laugh? Today serious footwear retailers offer free returns for their wares, understanding that shoppers just won’t buy if they can’t take it back. Digital retail has evolved in tandem with consumer behaviour as retailers move to respond to the way that technologically-enabled consumers want to buy. Largely, it seems, those customers want to buy wherever, whenever and however suits them – and for the lowest possible price.

“Today, having an online presence for retailers is just not enough,” said Martin Smethurst, managing director of retail at Wincor Nixdorf. “Consumers now expect to be able to shop anywhere, anytime and anyhow they choose. This can mean any mixture of ordering in-store but being delivered to home, ordering online for home delivery, ordering online but collecting from the store, starting a transaction at home and picking that transaction up to complete when you reach the store. The possibilities are limitless.”

Peerius’ Brown says that as online shopping develops expectations will continue to grow. “Online shopping enables consumers to browse freely, purchase quickly and find information easily wherever they are and on their preferred device,” he said. “The rise of geo-location technology will further revolutionise both online and in-store shopping as consumers receive personalised messages in real-time to create an engaging experience however they prefer to purchase goods or services,” he said.

Convenient delivery

How the goods are delivered has become ever more important as the market has become more competitive. Back in 1994, being one of only a handful of online retailers (Amazon’s roots go back to that year) could be enough to win the business of a determined digital shopper. Today some 16% of all non-food retail happens online and how quickly the goods can be delivered is critical in consumers’ buying decisions.

Becky Clark, chief executive of parcel data management platform NetDespatch, said: “Today, retailing is a multichannel experience underpinned by innovation and technology. The significant growth in the ecommerce market means that the delivery of goods has become an ever more important part of a retailer’s customer service from both a speed, convenience and delivery perspective.

“The shift to conducting business online has led to a rise in volume and variety of packages, parcels and services handled by carriers. Right now, for a retailer to capitalise on the continued growth of online sales, it is essential that its chosen carrier is able to offer a range of services to suit the customer’s increasingly diverse delivery requirements.”

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