Quickly moving on to the next Internet Myth: eCommerce is disrupting retailing.
We answered this question back in December 2009 when we discovered that after 15 years of investment and activity eCommerce accounted for 4% of America’s retail spending.
Once we discounted the pre-existing mail order catalog industry from the growth equation (i.e. about 1%, in retail sales in 1990) we discovered that the eCommerce revolution added just 3% to the bottom line of America’s retailers over the past 20 years.
This was confirmed about 6 months later when we created a bubble chart of the US retail sector when we explored the question of just how important the internet was to the US economy.
Again we can see the economic impact of the internet on the retail is again not overly significant in dollar terms and that despite the growth since 2007 the sector remains more of a niche than a mainstream player.
Having said that we must acknowledge that eCommerce has disrupted a key sector of the retail economy (Think: Music) and that customers are now using the internet for research. Plus we recently discovered that eCommerce was about half the size of the Retail and Food Franchise Sector back 2007 and looking forward there is the potential for mCommerce has the potential to disrupt retailing in the future.
However, as any experienced retailer will tell you, the real impact of the internet over the past 15 years is to be found in the significant role it has played in optimising the manufacturing and distribution stages of the global retail supply chain. So who knows perhaps the eCommerce revolution is yet to move through the value chain and revolutionise the customers shopping experience?
As I have said before it would be interesting to do a comparative study of how the eCommerce revolution compares to Chicago’s Direct Mail Catalogue Revolution. Pioneered by Sears and Wards, and fuelled by the rail roads and the US Postal Service, the Mail Order industry revolutionised US consumer spending at a time when Retail Chains represented only 3% Of the market. Statistics from that period are very hard to come by but anecdotal evidence suggests the growth in eCommerce over the past 15 years has been marginal at best compared to the revolutionary “retail platforms” that Sears and Wards built in the 1890′s.
Posted on May 31, 2011
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