E-commerce Trends Change is a SURE thing! Pamela J. Brown, Ph.D. Associate Professor & Extension Entrepreneurship Specialist Tucumcari Workshop Basic Track

E-commerce Sales of goods and services where an order is placed by the buyer or price and terms of sale are negotiated over an Internet, extranet, EDI, , or other online system. Source: U.S. Dept of Commerce News, Feb. 24, 2005.

E-COMMERCE Customer driven Many choices Many channels Seamless interactions Relationships drive the business Source: eBusiness for a Customer-Driven World

Facts U.S million –37% over 2000 –81% of teens –63% of adults % % % % –60% women –66% men –Ethnicity Whites -68% Hispanics -60% Blacks -42% Source: Globe – 445 Million World home use 51% –U.S. –German –United Kingdom –France –Australia –Spain –Sweden –Switzerland –Hong Kong Source:

U.S. Economic Impact E-commerce sales 2004: –$69.2 Billion – 23.5% increase from 2003 – 2.2% of all retail sales are online (2005) 1.9% of total retail (2004) sales (1.6% ) – Retail sales up 7.8%

Challenges to e-commerce businesses Bad news: Browsers and shoppers not completing purchase Repeat visitors not purchasing Good news: Online businesses have a higher conversion rate than brick and mortars online

Changing Demographics

SEGMENTING E-CONSUMERS Young females – buy less Males – shoppers/buyers Older adults – information seekers Minorities – increasing as access increases

Why aren’t “they” are buying? 28% of online consumers do not buy online 59% search aggregate sites, not merchant sites Value the in-store experience Delivery costs Credit security Delay in purchase satisfaction No credit Seeing is believing Too complicated Source: Why Some Consumers Don’t Buy Online,March 30, 2005

E-Loyalty: Is it real? Multiple retailers Price Good service Emotional connection/loyalty Relevance to customers Keep customer as central focus of e- commerce Source: Getting the Most Out of Retail Loyalty Programs, March 8, 2005

What do e-customers want? TRUST –Recognizable sender –Easily read content –Quick response to inquiries –Real answers to real questions –Sequence of steps –Privacy info Source: Forrester, Best and Worst of Customer Service,

Online sales $300 Billion Most categories grow 10-20% annually 77% of households will have access –40% will shop online –2 million / yr will shop online – – 50% US households with broadband

Impact on Business Conducting business Costs Profit Time Customer relations Employees Vendors Policy E-business is saving AND selling! Source: Access Minnesota, 2005