Top Internet Trends of 2000-2009: E-commerce
Over the past decade, Amazon.com and eBay have continued to dominate the online retail market in the United States. However, there have been signs that more social and distributed forms of online shopping are gaining traction. eBay, in particular, is beginning to lose ground.
In this post, we review the past decade of e-commerce and the key trends. Advances in recommendations technology, together with the emergence of social media and mobile commerce, have combined to change the way e-commerce is transacted. In a follow-up post, we look at current statistics for online retail.
This is the third in a ReadWriteWeb series looking back at some of the key trends of the past 10 years. We previously covered the online music industry and the democratization of news media.
Recommendations Technology Advances
Over the past decade the online retail industry has seen great strides in the use of recommendations technology. Amazon has consistently led the field in this, with its sophisticated blend of personalized, social and item recommendations.
Many of the retail recommendations in use today rely on implicit user data. These systems typically track user data, which is then analyzed with a set of usually proprietary algorithms. The end result: recommendations for users. Earlier this year we looked into Baynote's recommendation system:
"Baynote observes real-time user behavior on a site and looks for implicit, emergent patterns. It uses collective intelligence and an affinity engine to analyze the data. Common behaviors which it tracks include page refers, queries, mouse movement, time spent on a page, peer behavior."
Other similar recommendation technologies we've profiled include MyBuys, ATG and richrelevance.
Social Media Takes Retail to Blogs, Social Networks
As with nearly every other industry, shopping sites have increasingly used social media to promote their wares.
According to Shop.org's recent eHoliday Study, 47.1% of retailers surveyed will be increasing their use of social media this holiday season. Specifically, more than half of retailers have "added or improved their Facebook page (60.3%) and Twitter pages (58.7%)" this year. Nearly two-thirds (65.6%) have "added or enhanced blogs and RSS feeds" over the same time period.
One result of this has been a big increase in implicit social recommendations data across social networks and blogs.
Another trend with ecommerce sites is distributed sales. Anyone can embed an Amazon store into their blog or social network these days. As Kurt Collins of social commerce vendor Cartfly told us in December, this won't replace "end destination e-commerce" - but it will "augment sales tremendously" at the edge of the network.
Mobile Commerce Arrives, Albeit Slowly...
The growth of mobile phones has been a big trend this decade. However, as Sarah Perez wrote in September, mobile commerce in the U.S. market has struggled for momentum.
According to data from eMarketer, more than 70 million U.S. mobile phone users will access the internet from their devices this year. Despite this, the m-commerce market remains immature. In an April 2009 survey by RIS News, privacy and security concerns are still at the forefront of both shoppers' and retailers' minds.
There is some promise that mobile commerce will finally gain traction in the coming decade. Mobile payments firm Billing Revolution found that on-the-go consumers are happy to purchase small ticket items like pizza and movie tickets, for example.
One market that has shown strong signs of mobile commerce growth is Japan, according to Morgan Stanley.
See also our analysis of mobile payments.
Conclusion
New recommendations technologies make it easier every year for consumers to find what they want, social media has driven a lot of retail activity to small websites and social networks, and mobile commerce has slowly but surely gained a foothold in e-commerce.
These are just some of the trends in e-commerce over the past 10 years. While Amazon.com and eBay continue to be the giants of online retail, the Social Web and advances in web technology have both had a big impact this decade.
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hahah just what i thought!
I loved the chart on Desktop/Mobile Commerce in Japan...note the years at the bottom, from 2004 to 2008.
In 2000, Japan had 100Mbps / 100Mbps fiber bandwidth (and pipes) to the Internet costing Japanese consumers approx $55 per month. By 2006, thanks to the investment in Fiber, a Japanese customer could simply switch out their ISP provided modem and increase their bandwidth from 100Mbps/100Mbps to 1Gbps/1Gbps for less than $52 per month.
I would suggest to you that fiber over the last mile to Japanese customer homes is the real reason you see them purchasing more from the Internet, that and their economy is recovering faster than ours.
Remember the Green part of the bar is "Desktop" eCommerce! While they have increased every year, there was a bit more of a jump in 2006.
Whether you want to make a case that the telcos are not only preventing innovation via bandwidth shaping, bandwidth caps, deep packet inspection and restricted bandwidth is up to you. But to deny that there is a correlation seems very short sighted.
There is something wrong about paying over $50 per month for "up to" 16Mbps down / 2Mbps up yet being restricted to "less than" 300Kbps down and 40Kbps upstream. And that is a Cable provider folks, DSL would be faster assuming that you get the entire 1.5Mbps downstream and full 384Kbps upstream and would cost you less than $30 per month.
Note: If you do not use the DD-WRT open source software, you probably do not have a clue that you are being throttled/restricted in your bandwidth. That "Speed Test" only shows bandwidth during that instance in time, as soon as the Speed test finishes, the DD-WRT software will show you in real time, 24 X 7 what your actual bandwidth is. And it is not good! Hard to stream content when you are bandwidth shaped to such low levels of bandwidths by cable providers.
Do not purchase a Firewall/Router hardware device if it will not support the open source DD-WRT software!
Fortunately there are two companies that are doing something about this, Greenlight in Wilson N.C. (Fiber over the last mile to your home serving 100Mbps / 100Mbps for $100 per month) and Utopia in Utah where customers can purchase their Fiber connection, User owned Fiber... Check to see if you can own your fiber and secure your family's future of decent bandwidth. If you plan to own your home for a significant period of time, the $2,000.00 investment to get Fiber would be worth it.
Tell your local politicians that you want this for your family, kids and descendants!
Landlords, if you put Fiber to your rentals, they will rent, at higher monthly rates, than anything else in the area...The technology exists to multiply a single strand of fiber from 1X to 1024X and has for years, though I am sure it would cost you. How many apartment buildings have more than 1024 apartments, not very many and that is a single strand of fiber.
Telcos, help us out of the coming recession, give us fiber or give us death...besides you took our tax dollars back in the 1990s with promise of fiber...Where's the Fiber? (Hint: FIOS did not exist back in the 1990s, so their Fiber base is extra...telcos fix this, please.)
when your company is doing e-commerce, it's easy to integrate together.
Now, many companies has already used Spread and maintain good relationship with clients. It's also works for explore new customers.
You can blast email by using Spread – email marketing software and service . It's a professional web-based Email marketing platform, you can track who opens, clicks, etc.
Shopping recommendations through twitter drives low quality traffic.
I was actually thinking the other day how it looks like Ebay are not as popular as they once were.
Weird.
As an avid online shopper, I see tons of benefit in the growing maturity of recommendations technology. That being said, there is an element of shopping that these sophisticated technologies and complex algorithms miss for me ... I want to be inspired, intrigued and entertained when I shop online. Having my online behavior and past purchase history regurgitated in the form of recommendations for up-sell opportunities can be downright boring. Develop an engine that can get into my head and show me something I hadn't event considered, but would be thrilled to buy, and then you've got me.
Completely agree with PatriciaMejia comments above. Great article and in the Social Media Takes Retail to Blogs, Social Networks section that 47.1% of retailers surveyed will be increasing their use of social media this holiday season was an interesting stat. I do wish it was higher though as I don't understand why all brands are not engaging more in the social media space.
I am really impressed with what big brands (who are taking advantage of social media) are doing with their Twitter profiles and how creative they are getting with their Facebook pages. Social shopping is probably the next big trend on networks such as Facebook, MySpace, etc. I am seeing a lot of really cool social business tools starting to come out to help us retailers and one I started using last week that added a shop tab to my Facebook page is from http://www.facebook.com/ShopTabApp
I think the next big step will be how to leverage social shopping with reviews, wish lists, etc. What brands are you seeing doing a great job with social media?
Agreed - the impact is real, and growing. We're seeing significant results from customers of ours using our automated personalization technology. For instance, the impact on Tommy Hilfiger’s online revenue doubled over the holiday shopping season last year – from 16 to more than 33 percent with recommendations technology.
That number continued to increase into the next quarter, to over 40 percent. This impact helped generate an incremental increase in shopper conversion rates. The likelihood of checkout was three times higher for those shoppers who interacted with automated recommendations than those who did not.
Tucker Walsh
ATG
It is interesting to see the economic impact of social media!
It's interesting to see any data on augmented reality and its use in e-commerce. For example Zappo's just launched clickable product videos for their Nike products. Also 360/3D product presentations/views are getting better traction these days. We at WebRotate 360 are surely hoping for increased demand in this sort of technologies.
Well thats a fact its going to be the end of an era and Amazon and eBay have been the largest giants in online retail market. I wonder whats coming in the coming decade.:)
trends in e-commerce over the past 10 years
5555 good idea
Great article! On the note of mobile commerce... If you are in the process of developing an m-commerce storefront for your business, you may want check out the mCommerce WebKit UI, which is an Open Source mobile commerce UI for WebKit-enabled mobile devices. This is a user interface framework is for a WebKit-based mobile commerce website or application and is helpful aid for seeing the possibilities of what one can do with a mobile storefront.
http://www.timewavemedia.com/mcommerce/
It's good to see these changes and the old-stand-by's losing a little ground. Ebay has become an expensive proposition in some cases while Amazon continues to expand their reach.
It's all a far cry from the old brick and mortar retail world.
Margaret
2010 years of E-commerce
i think E-commerce is better than other systems
you may want check out the mCommerce WebKit UI, which is an Open Source mobile commerce UI for WebKit-enabled mobile devices.
i think E-commerce is better than other systems
Every time I see articles like this talk about how to drive more traffic. I believe traffic is important but what if once you get the traffic and you don't have the right content to show for it??? Let's say an XYZ online shoe store has 100,000 hits a month but their product images are so poor comparing to the other less traffic sites...do you think they sell more? Product presentation speaks for itself. Using 360 degrees product photography, online shoppers can inspect the product in all angels and they can even zoom in to see the details. MediaSpin360 (http://www.MediaSpin360.com/blog) offers this kind of services.
E-commerce is better than other systems
which is an Open Source mobile commerce UI for WebKit-enabled mobile devices.
2010 years of E-commerce