Online Shopping Growth Rates Remain Strong
Thanks to the widespread availability of both Wi-Fi and cellular Internet service combined with the popularity of mobile devices like smartphones and tablet computers, consumers are flocking to e-commerce sites in record numbers. According to the Internet monitoring company comScore, during the 2012 holiday shopping season (November and December) American shoppers spent a record $42.3 billion at online retail stores, up 14 percent from 2011! Industry-watchers predict this double-digit growth trend will continue, estimating that online retail sales will increase from $226 billion annually in 2012 to $327 billion by 2016.
Why Online Shopping Is On The Rise
A major factor in the rise of online shopping is an overall increase in consumer confidence with digital banking and finance; shoppers now feel more comfortable with the security of online shopping sites and Internet-based payment methods than they did in the past. Another driving force behind the growth of e-commerce is convenience; online shopping allows consumers to browse and buy 24 hours a day, 7 days a week from anywhere, saving the time and hassle of traveling to a brick-and-mortar retail outlet.
Many retailers have also been able to lower prices and provide incentives to shoppers like free shipping and online-only discounts, thanks to the reduction in overhead costs. These Internet-based deals have helped boost online spending, particularly among savvy shoppers who are price-sensitive. Online shoppers also note that e-commerce sites provide them with a greater selection of merchandise than traditional outlets do, allowing them to buy hard-to-find products, sizes and styles with a simple click of a mouse.
How Mobile Use Affects Online Spending
Mobile device use has been credited as a major factor in the rise of online shopping; as of November 2012, over half of all cell phone users in the U.S. owned a smartphone (Internet-enabled phone) and many of them use their phones to shop; between May 2011 and May 2012 mobile e-commerce grew by 89%. Smartphone use has also led to the rise of a consumer behavior known as “showrooming” – shoppers browse merchandise at a retail store then use their mobile device to comparison shop right from the showroom floor. This means that retailers need to offer a mobile-friendly site to capture a share of the growing mobile e-commerce market.
The Future of e-Commerce
Online shopping and spending has transformed the retail industry and the trend towards e-commerce is predicted to continue throughout the next decade. Advances in technology (such as SmartTVs and the widespread availability of low-cost mobile Internet devices, Wi-Fi and 3G/4G cellular service) combined with increased consumer confidence in online payment methods means that retailers need to develop a strong Internet presence in order to thrive in the new digital retail environment. For some businesses, this means that their brick-and-mortar stores will be completely replaced by an online e-store; for others, their existing retail operations can be supplemented with a mobile-friendly e-commerce site that provides consumers access to their products 365 days a year, ensuring that customers can have instant access to the products and services they want on their own terms.
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