Are We Starting to Approach Peak E-Commerce?
April 4, 2019 | Contributed by: Greg Sterling
Since the beginning of the internet, pundits have predicted that e-commerce will take over nearly every shopping and retail category. According to US government data, last year e-commerce captured a roughly $513 billion share of retail spending.
That’s impressive until you recognize that total retail spending was more than $5.3 trillion in 2018. Accordingly, e-commerce is hovering at ~10% of total US retail. Nonetheless, that’s something of a milestone. Yet these oft-quoted stats don’t include services, which form the bulk of the US economy (roughly $10 trillion of 19+ trillion GDP) and are overwhelmingly fulfilled offline.
As I’ve tried to argue for many years, the most profound thing that’s happened since the inception of the consumer internet is not e-commerce but the internet’s use as an influence on offline (local) purchases. That will continue to be the case well into the future because even as e-commerce’s overall share of retail continues to grow the rate of growth is slowing.
We’re approaching peak e-commerce, which may climb to 15% of retail in the next 5 – 7 years perhaps. (But by then the Zombie Apocalypse may make this conversation entirely moot.)
Buy online, pick up in store or online scheduling is in something of a gray zone. Is online scheduling of car maintenance or a dentist appointment an “e-commerce” transaction? I think the answer has to be “no,” unless fulfillment can take place entirely online.
Despite it’s still comparatively small contribution to the overall economy, e-commerce remains very disruptive and will continue to displace both traditional and SMB retailers alike — a longer discussion that I’ll reserve for later — unless they can master omni-channel commerce and/or dramatically improve the (in-store) customer experience.