Retailer performance, store productivity and consumer spending

Ecommerce Turns 20

Happy 20th birthday ecommerce! In 1994 a Sting CD sold for $12.48 on NetMarket, marking the first-ever online transaction. Within a year, eBay and Amazon were born and changed forever the way people buy and sell goods and services.

Today Amazon and eBay are household names, contributing to the steady increase in ecommerce sales worldwide. But when they were founded in 1994—Amazon out of Jeff Bezos’ garage—online transactions barely existed. Now, Amazon is the sixth-most-trafficked site in the US—with 92.5 unique visitors in June, according to comScore—and eBay the 11th-most-popular.

In the intervening 20 years, Amazon has grown into an online marketplace to be reckoned with—its tentacles extend from local online marketplaces that sell things from apparel to books and kitchen appliances to server storage for the US government. The company now employs over 100,000 people worldwide.

comScore Ad Metrix also suggests that Amazon is now the US advertiser with the seventh highest number of digital display ad impressions. And its net ad revenues worldwide will reach $1052.3 million in 2014, eMarketer estimates.

Online ecosystems and entire industries have developed around sites like Amazon and eBay. Online payment giant PayPal, which developed largely to support eBay’s online transactions in a secure fashion, counted 142.6 million active registered user accounts worldwide in Q4 2013.

And Amazon established a high standard for online path-to-purchase metrics that all marketers now try to reach—or at least approximate. Marshal Cohen, Chief Industry Analyst at the NPD Group, explained the benefits of Amazon’s extensive and comprehensive tracking scheme for its customers and business in an interview with eMarketer: “Amazon does a great job at both making a suggested purchase and getting the timing of the message right. For instance, a month after buying a blender, a customer will get a notice to ‘buy a protective cover.’ What’s significant is that Amazon knows that extra purchase won’t be made at the same time someone is buying a $300 blender, but another $50 is OK a month later.” Everyone wants a piece of the action, especially retailers who worry that their brick-and-mortar businesses will be eclipsed by the convenience and sophisticated recommendation engines websites provide.

B2C ecommerce is now a $1.471 trillion business worldwide and eMarketer estimates it will grow to $2.356 trillion in sales by 2018.

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And mobile—for researching or making the final purchase—will progressively account for a larger chunk of those sales.

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