You’ll remember in yesterday’s post we discovered that eCommerce had added 3% to retail growth over the past 20 years. This makes eCommerce more of a niche outlet than a revolution in retailing.
Back in July of 1998 Nicholas Negroponte wrote an article for Wired magazine entitled The Future of Retail. It began with these two paragraphs…
“You enter a store. You see something you like. You write down the product name and manufacturer. You go home and order it over the Internet. As a result, you didn’t have to carry it, you probably got a better price, and you may have avoided sales tax.
The store in this scenario is merely a showroom. Have I just described the exception to tomorrow’s retail, or the rule?”
As you can see Nicholas had his eyes firmly set on the future; even if he had little practical understanding of the realities of retail. After all who is going to resist temptation and put that little black dress back on the rack when they are carrying plastic?
This brings us to the crux of the real growth story in retailing of the past 20 years: The credit card.
A decade on Nicholas Negroponte’s vision of the future of retailing is now a lot closer with the emergence of the Red Laser and ShopSavvy Mobile Phone Bar Code Scanners we looked at in Point, Click and Discover the Future of Retailing. The key however, as I explained in it’s the new Plastic and yes it’s fantastic, is the karios moment. When the impulse to buy takes hold and the urge to complete the purchase overwhelms you.
That’s why paying your way with the new plastic is the past, present and future of retailing and that’s also why last month MasterCard showed its hand in the high stakes game of Mobile Payments.
In 2008 there were 26.5 billion U.S. credit card transactions, totalling $2.1 trillion. That was up from 21 billion transactions totalling $1.4 trillion in 2003. (Source: Nielson Report, December 2009)
So in the 5 years it has taken eCommerce to grow by $72 Billion the credit card industry has grown by $0.7 Trillion.
Which market would you rather have a slice of? Thought so…
The good news is mCommerce promises to deliver the convergence of both markets. The next decade not only promises to deliver eCommerce on the move it also promises to deliver the mobile payments platform that will allow us to “Charge it!” when ever and where ever we may find it. (See GigaOm’s Are You Ready for iEconomy?)
The only question is do customers really want the new plastic or are they happy to keep shopping with their credit cards?
[Update 25-1-2010]
Gigaom asks Will Amazon Be the New Wal-Mart?
“Amazon has a 0.3 percent share of the U.S. retail market, compared to Wal-Mart’s 7.7 percent share. But Amazon already has an 8 percent share of the U.S. media retail category”
January 1st, 2010 → 2:14 pm
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