E-commerce Essentials
(Consumer Case)

According to the United States Census Bureau, e-commerce accounted for 8.3% of all U.S. retail sales in the 4th quarter of 2016.  This activity represents $102.6 billion in goods and services, out of a total $1.2 trillion.

The data shows that e-commerce, as a percentage of all commerce, is steadily growing:

Even after the financial crisis of 2007-2008 which saw a decrease in total retail sales, e-commerce activity increased both in relative and absolute terms.  It is safe to assume that e-commerce will continue to grow into the foreseeable future.  Some of the factors driving this trend from the vantage point of the consumer:

Price – The Internet makes it easy for the consumer to compare the price of a particular product or service from multiple sources.

Information – Product specifications and reviews are readily available online, facilitating the purchase decision.

Convenience – The consumer may browse and purchase goods anywhere he or she has an Internet connection – the home, the office, public locations with Wi-Fi access, etc.  Furthermore, e-commerce is generally available every day including holidays, and at all hours of the day and night.

Efficiency – Online stores have certain efficiencies compared with traditional bricks-and-mortar stores.  There is no time wasted driving to an online store, or searching for a parking space, or standing in a checkout line.

Anonymity – Some consumers avoid the public eye and, if they are self-conscious about their purchases, may prefer to shop in privacy.

The Rise of Technology – Some forms or commerce (think music sales, computer sales, and stock trading) have evolved through technology and now exist almost entirely as e-commerce.  New currencies such as bitcoin encourage e-commerce.

As technology evolves, e-commerce will likely develop greater consumer benefits and become more accessible.  It should therefore continue to grow as a percentage of total sales.  To what extent will depend on the relative merits of traditional commerce.

- Endertech Alumnus | 

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