Marketing Land exposed new data from Custora, which estimates that e-commerce grew 10% year over year in February. By comparison traditional US retail grew 1.5%. Beyond this mobile commerce grew at a higher percentage than e-commerce overall and represented nearly 20% of total e-commerce sales in February.
Extrapolating from the figures provided, if Q1 2014 US e-commerce turns out to be roughly $52 billion then mobile commerce would constitute nearly $9.9 billion of that total. Those are big, impressive numbers but in the larger context of all goods and services they’re still quite modest.
E-commerce February 2014 vs. 2013
In 2013 total US e-commerce was something in excess of $200 billion (call it $210 billion) per comScore’s estimates. However the US Census Bureau estimates 2013 e-commerce was worth roughly $262 billion.
That $262 billion represented approximately 6% of total US retail, which was just over $4.5 trillion. US GDP last year was about $16 (or so) trillion.
The US government estimates that 68% of US GDP is services (or nearly $11 trillion). According to the US Bureau of Economic Analysis, about 70% of the economy is consumer spending. These numbers are highly overlapping but not identical. But let’s say that more than $11 trillion annually is spending by consumers on goods and services.
If roughly $4.5 trillion is retail spending, more than $6 trillion is services spending using the numbers above. I’ve separately estimated that offline spending on retail sales and services by US consumers is in excess of $9 trillion annually.
Let’s use my more “conservative” $9 trillion figure.
Surveys done by Opus Research, eTailing Group, Forrester, BIA/Kelsey, Yahoo and others indicate very large numbers of internet users conduct “O2O” research. The surveys show a range of between 60%+ to more than 90% of internet-enabled consumers conduct online research before buying offline.
Consumers are not researching every purchase online before buying offline. However with smartphones they have access to reviews, product and price information about products and services everywhere they go. We know that as many as 80% use smartphones in stores to do research on products they’re looking at.
If we assume, conservatively, that somewhere between 20% and 40% of consumers’ offline purchases are touched by online research in some way that would mean something on the order of between $1.8 and $3.6 trillion dollars in annual spending on goods and services are influenced by the internet. In higher consideration purchase scenarios online research will be more prevalent and intensive.
Therefore I point out again that O2O shopping is more than 10X e-commerce spending. And with the advent of smartphone tracking, sales data matched to online users and indoor location, marketers and brands are starting to get a better sense of how much larger and more important the O2O market is.