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Introduction to Business 2e

12.11 Trends in E-Commerce

Introduction to Business 2e12.11 Trends in E-Commerce

12.11 Trends in E-Commerce

  1. What is e-commerce, and how has it affected the retail sector?

E-commerce is related to social media and other new online platforms because it utilizes the internet for marketing communication. E-commerce refers to the development and maintenance of a company’s website and the facilitation of commerce on the website, such as the ability for customers to order products online, to get questions answered about products, and for the company to introduce new products and ideas. E-commerce can include special components designed specifically for separate target market segments. Anything associated with an actual company website related to marketing can be considered e-commerce.

E-commerce was nearly 20 percent of all retail sales in 2024, and globally it is projected to increase to over 22 percent by 2028.21 Why? One reason is the economics of shopping. The convenience of shopping online is a key driver of this trend. The time to make a purchase in a traditional brick-and-mortar store includes factors such as the commute to the store, the cost of that commute, finding the product(s) you want, comparison shopping in-store, and other related activities that take time and money. Through e-commerce, purchases can be made more efficiently, saving the shopper both time and money by facilitating instant access to product information of both the product of interest and similar products for comparison shopping.

Countless small businesses have taken the plunge to serve the growing population of online shoppers. Many e-commerce businesses, including e-jeweler Blue Nile, luggage site Away (direct-to-consumer brand), and Zappos (owned by Amazon) are relying on e-commerce, with reports indicating that 35 percent of small businesses in the United States use e-commerce as their primary sales channel. The increasing sophistication of search technology and comparison-shopping sites have allowed online businesses to market their products to millions of potential customers cheaply and effectively. Often, these innovations are bringing less-well-known brands and merchants to consumers’ attention.

Online merchants can offer a far broader array of merchandise than specialty brick-and-mortar retailers because they don’t have to keep the products on store shelves. In response to this challenge from online-only retailers, firms are turning to technology to gain an advantage by equipping their in-store sales associates with tools to more efficiently assist customers, such as tablets to check stock availability at other locations and pricing options online versus in-store.22

After a slow start, the world’s largest retailer, Walmart, has begun moving into e-retailing in a big way. It is now in almost every major category of web-related consumer commerce. It is estimated that Walmart has approximately 200 million items across all of its outlets, compared to 600 million items available through Amazon. The company has taken some innovative steps to leverage the web to drive people to its stores. In 2016, Walmart CEO Doug McMillon (who led the company until January 2026) acquired Jet.com for $3.3 billion and appointed Jet.com's CEO Marc Lore to run Walmart's online business. Lore led Walmart's e-commerce division until January 2021, helping jumpstart the retailer's digital transformation. A case in point is the company’s online tire service, which allows you to order automobile tires to be picked up and mounted at a Walmart tire center. Customers can order prescription refills for delivery by mail or for pickup at a Walmart pharmacy department. Walmart’s online photo service, in addition to providing a way to store pictures on the web, allows customers to send digital pictures to be printed in a Walmart store of their choice, with a one-hour turnaround.23

Concept Check

  1. How can brick-and-mortar stores use technology to compete with online giants such as Amazon?
  2. What factors contribute to the internet’s soaring growth in retailing?
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