LONDON, March 31, 2015 /PRNewswire/ -- Executive
Summary
Internet commerce (or eCommerce)—that is, consumer retail
transactions that take place over the Internet—has expanded over
time until it now challenges conventional retail commerce, in
scope, if not yet magnitude. Such transactions will very likely
become a preferred method for obtaining durable goods and those
items that do not require direct or in-person comparison shopping.
In fact, it is possible to purchase just about any good, service or
commodity over the Web right now.
Perhaps the most transformational aspect of Internet-based
commerce, though, is the degree to which it is becoming integrated
into conventional retail. People still like to frequent retail
outlets, but, increasingly, they take the Internet with them on
their smartphones. Access to online shopping sites and
manufacturer's Web sites allow for on-the-spot comparison shopping;
or worse, from a retailer's point of view, the loss of a sale.
Yet, as this market explodes, its impact on consumer lifestyle and
the value that consumers place on communication services is also
fundamentally changing. As our survey data disclose, consumers are
now assessing the value of broadband access services based on the
degree to which such services facilitate activities such as buying
online.
Network operators have not yet taken the plunge into Internet
commerce activities that they could. Although many players are
expanding their subscription television offerings to include video
marketplaces, operators still think of themselves primarily as the
pipe over which retail transactions may occur. To use an analogy,
they approach eCommerce as the builders of the roads that consumers
can take to the shopping malls, rather than as the mall owners.
eCommerce represents a real opportunity for the consumer
telecommunications sector, but will require a fundamental
rethinking of market strategy by the telecommunication
participants.
Introduction
Two hundred and fifty billion dollars
($ billion) worth of retail commerce flowed over the Internet in
the US economy in 2013. By the end of this year, that number is
likely to be in excess of $ billion. This is a staggering amount of
commerce; and the projected rate of growth is in excess of % CAGR
over the next five years. Clearly a sea change in consumer buying
habits is occurring.
Yet, why is this growth happening now? Data suggest that we have
reached an essential critical mass of broadband connectivity in the
North American market; one which makes Internet commerce easy and
accessible. Consumers, who are becoming ever more comfortable with
life online, are discovering that making purchases in the virtual
marketplace is easy and increasingly comprehensive.
This confluence of broadband accessibility and comfort with
computer-assisted shopping is not only driving up retail sales
online, but is also influencing conventional retail operations in
interesting ways. Retailers are increasingly dependent on Web
advertising and Web-enabled shopping tools to drive business. Many
consumers now go to the mall armed with a smartphone and
applications as varied as bar code readers and electronic
coupons.
Although online security may be increasingly of concern to
consumers, data show no indication that security is currently
preventing Internet commerce. However, the data suggest that
consumers are somewhat more concerned this year than they were last
year. Since online retail operations fundamentally depend on credit
and trust, this aspect of eCommerce will likely increase in
importance.
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