Growth of Ecommerce

The impact of ecommerce is far and wide, rippling from small businesses to global enterprises.

Here we’ll highlight some of the major ways ecommerce has shaped the retail landscape.

Large retailers are forced to sell online.

For many retailers, the growth of ecommerce can expand their brands’ reach and positively impact their bottom lines. But retailers who have been slow to embrace the online marketplace are the ones facing the biggest challenges.

In February 2019, online sales narrowly surpassed general merchandise stores for the first time, including department stores, warehouse clubs and supercenters. And since Amazon Prime took away the price of shipping, more consumers are comfortable with online shopping — which means larger retailers have little choice but to go digital.

Ecommerce helps small businesses sell directly to customers.

For many small businesses, ecommerce adoption can be a slow process. However, those who embrace it may discover that ecommerce can open doors to new opportunities.

Slowly, small business owners are launching ecommerce stores and diversifying their offerings, reaching more customers and better accommodating those who prefer online/mobile shopping.

However, with ecommerce sales growing by the year and one in four small businesses still lacking an online store, there remains a prime opportunity for entrepreneurs to gain a competitive edge and expand their businesses online.

B2B companies start offering B2C-like online ordering experiences.

With 90% of B2B customers expecting B2C-like digital experiences, B2B companies must work to improve their customer experiences online to catch up with B2C companies. This includes creating an omnichannel experience with multiple touchpoints and using data to create personalized relationships with customers.

Ecommerce solutions can allow self-service, provide more user-friendly platforms for price comparison and help B2B brands maintain relationships with buyers, too.

The rise of ecommerce marketplaces.

Online marketplaces have been on the rise since the mid-1990s with the launch of giants we know today, such as Amazon, Alibaba and others.

Amazon in particular is known for its unique growth strategy that has helped them achieve mass-adoption and record-breaking sales. By offering a broad selection and extreme convenience to customers, they’ve been able to quickly scale up through innovation and optimization on-the-go.

But Amazon doesn’t do this alone. In the fourth quarter of 2021, 56% of Amazon’s paid units were sold by third-party sellers (i.e. not Amazon).

Supply chain management has evolved.

Survey data shows that one of ecommerce’s main impacts on supply chain management is that it shortens product life cycles.

As a result, producers can present deeper and broader assortments as a buffer against price erosion. But this also means that warehouses may see larger amounts of stock in and out of their facilities.

In response, warehousers may offer the following value-added services to help make ecommerce operations more seamless and effective:

• Separation of stock/storage for online vs. retail sales: Calculate forecasts and replenish stock separately for online and in-store in order to achieve more accurate results.
• Different packaging services: Choosing the right pick-and-pack software can help businesses ship orders quickly and accurately.
• Inventory/logistics oversight: Following best practices for inventory management is key to managing stock levels.

New jobs are created.

Ecommerce employment is set to increase by 32% in 2022, overshadowing the 28% growth documented in 2021.

In addition, according to the U.S. Bureau of Labor Statistics, computer jobs are projected to increase by 13.4% over the 2020–30 decade — which is 5.7 percentage points faster than the 7.7% average for all occupations.

Customers shop differently.

Ecommerce is revolutionizing the way modern consumers shop.

Today, we know that there are at least 2.14 billion digital buyers, which is 27.6% of the 7.74 billion people in the world. And by 2025, Statista projects there will be 291.2 million online buyers in the U.S. alone.

Social media lets consumers easily share products to buy online.

Today, ecommerce shoppers can discover and be influenced to purchase products or services based on recommendations from friends, peers and trusted sources (like influencers) on social networks like Facebook, Instagram and Twitter.

Many social media platforms now offer ecommerce features, such as in-app checkout, shoppable posts and “Buy Now” buttons that take users directly to a brand’s product page.

Global ecommerce is growing rapidly.

In 2021, over 2.14 billion people worldwide were estimated to shop online, up from 1.66 billion global digital buyers in 2016.

Chinese ecommerce platform, Taobao, is the largest online marketplace with a gross market value (GMV) of $711 billion. For context, Tmall and Amazon ranked second and third with $672 billion and $390 billion GMV in annual third-party global market value respectively.

With so many ecommerce platforms, marketplaces and digital solutions available, there are practically no limits for merchants looking to sell online, which makes it easier than ever for businesses to go global.