Changing the World of e-Commerce, One Buzzword at a Time? Lessons from Summit


  • Online retail sales will total almost $300 billion ($294B to be exact) by the end of 2014
  • e-Commerce is expected to grow by an additional $120 billion to reach $414 billion in revenue by 2018

There was an incredible amount of excitement at the recent summit in Seattle about how mobile devices, social communities, and other new technologies are changing the way that consumers interact with brands. And representatives from major retailers were quick to assure us that they had matters under control and were prepared to tackle the challenges raised by the newly empowered mobile consumer – by delivering seamless, relevant, unified experiences across all channels.   

But once you get past their hype – how many big retailers are truly capable of making the significant changes required to shift from siloed, multi-channel commerce to true omni-channel experiences that blend commerce with content and social media. My guess? Not many.

Traditional retailers face many challenges including entrenched real estate costs, higher staff expenditures, inefficient distribution of inventory, out-of-date IT investments, and increased competition from both online retailers and direct sale manufacturers. Some retailers will be able to reinvent themselves and turn these potential challenges into strengths, but only a minority.

And that’s a shame, because another thing I learned at was that there is an armada of agile, well-financed e-Commerce start-ups that have the flexibility, the brands, and the right attitude to create some major disruption in the market. And the opportunity is huge. According to Forrester, cross-channel sales will account for $1.8 trillion, or 50% of total US retail sales by 2017 and that by 2018, mobile and tablet commerce will reach $293 billion in the US.1

As numerous speakers pointed out – we seem to be at an inflection point when it comes to online commerce. Vicki Cantrell, executive director of kicked off the summit by informing us that online retail sales will total almost $300 billion ($294B to be exact) by the end of the year. And Sucharita Mulpuru, VP and principal analyst with Forrester Research told us that e-Commerce is expected to grow by an additional $120 billion to reach $414 billion in revenue by 2018. Consumers are embracing new technology and using their always-on devices to research, discover and buy more products online. Meanwhile, in-store revenue appears to be growing as well.  In fact, Mulpuru recently predicted that in-store consumers will spend an additional $300 billion offline by 2018.2

This should be a rising tide for all retailers – a point that was emphasized by Katia Beauchamp, co-founder and co-CEO of the subscription-based beauty retailer, Birchbox. The company’s research indicates that – far from stealing customers from other beauty retailers – the company is attracting new customers that are not traditional buyers of beauty products, thus growing the overall market. Although this may be a self-serving claim from an aggressive start-up, it aligns with other research that indicates a growth in online shopping behavior.

And this growth has not been restricted to the United States. Kinsey claims that China has recently become the world’s 2nd largest e-tail market, with revenues as high as $210 billion in 2012 and a CAGR of 120 percent since 2003. Chinese consumers in small and midsize cities apparently spend as much as 27 percent of their disposable income on online purchases.3

Make no mistake, digital disruption is happening in retail. And it’s happening fast. Ten years ago, when the digitization of media began to decimate traditional business models, many publishers were taken by surprise – despite the fact that the writing had been on the walls for years. Back then, it was common to hear industry leaders insisting that they were confidently riding the wave of digitization and that they would emerge unscathed to capitalize on the new digital opportunity. In reality, few were prepared to make the major systemic changes required to stem the losses that were to follow. 

The list of victims of the media industry meltdown is well known by now –Blockbuster was killed by Netflix. Borders succumbed to Amazon and iTunes. And, of course, the entire newspaper business where print ad revenue recently hit its lowest point since 1950 – dropping from $37.6 billion in 2008 to only $17.3 billion in 2013.4

Many of these players were too big to change in time. But they certainly weren’t too big to fail.

But the biggest problem faced by these companies was not a lack of vision or the will to change, but that they lacked a strong connection to the customer. They may have thought that they knew who their customers were and what they wanted, but this understanding was outdated and based on assumptions that were no longer valid.

Major companies in the retail space cannot afford to make the same mistake as their predecessors in the media industry. The only way to avoid the mistakes of the past –and to ensure that all of these lofty speeches are more than just empty buzzwords – is to invest in technologies for understanding customer behavior on a granular level and to restructure their organizations around meeting these emerging customer needs.

It doesn’t need to happen all at once. In fact, trying to move too fast can be almost as disastrous as not moving at all. But it needs to happen.

At CoreMedia we advocate an incremental approach for companies seeking to transform their customers’ online experience. Take the time to truly map your customers’ journeys – then use this data to identify the areas of greatest pain. Once these pain points are identified, build cross-departmental teams to deploy solutions based on open technologies that are designed to integrate with existing infrastructure. It isn’t necessary – or even possible – to rip and replace everything that was built over the last 10 years. But companies that don’t take action now risk become case studies for the next generation of business students trying to figure out how many great retail brands could have disappeared so suddenly. (Glenn Conradt)


1 Forrester Research, “The eCommerce Juggernaut Dominates Retail”, May 8, 2014, Sucharita Mulpuru with Patti Freeman Evans, Douglas Roberge, Laura Naparstek

2 Forrester Research, “US Cross-Channel Retail Sales Forecast: 2014 To 2018”, July 24, Sucharita Mulpuru with Vikram Sehgal, Carrie Johnson, Laura Naparstek

3 McKinsey Global Institute, “China’s e-tail revolution: Online shopping as a catalyst for growth”, March 2013, Richard Dobbs, Yougang Chen, Gordon Orr, James Manyika, Michael Chui, Elsie Chang

4 Mark J. Perry, Carpe Diem Blog, April 25, 2014:

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