Sposato 1

Luke Sposato

Instructor: Malcom Campbell

UWRT 1104

April 2, 2019

E-Commerce is becoming a dominant force in Consumer Spending

Rapid technological growth is changing where we shop and how we purchase our

products. Upgrades and enhancements to mobile phones and computers seem to occur every

day. Consumer spending is a big factor in the economy and finding easier ways to purchase

through e-commerce can be a key growth factor. Amazon, which is a good example of e-

commerce, has become a dominant force thanks to their innovation with online sales and an

expanded use of technology, including artificial intelligence or AI. Companies such as Target

and Walmart have to change how they operate and are putting more of their resources to the

online market as compared to in person retail located in actual buildings. One of the biggest

questions facing the future of e-commerce is whether it will continue to grow or reach a ceiling.

Will retail stores soon be outdated or odd and e-commerce will be the norm?

While many brick-and-mortar stores are closing or are going bankrupt, e-commerce is

expanding rapidly (Orendorff, 2019). Many brick-and-mortar stores account for a large portion

of online sales (Orendorff, 2019). It is understood that the retail companies that are surviving the

changing economy are adapting to whether the consumer wants an “experience” or just a

“transaction” (Orendorff, 2019). The benefits of both are why some traditional retailers are

closing some stores and why some e-commerce companies are opening stores. This is why
 Sposato 2

Amazon bought Whole Foods (Keyes, 2018). There is still a human aspect to the transaction

whether it is online or in a store, but efforts are being made to make e-commerce more of an

experience (Orendorff, 2019).

E-commerce will likely continue to rapidly grow because of the ease and comfort of

online purchasing. Many consumers prefer to make purchases in the security of their home rather

than driving in traffic, find parking, and loading and unloading. It can be much easier and less

time consuming to shop on Amazon and have things delivered to the front door, especially if you

do not need them right away. Many local retailers, however, are now delivering within the same

day.

Smartphones and mobile devices such as an iPad have also made e-commerce or m-

commerce unbelievably easy. Mobility allows the consumer to shop whenever or wherever there

is WiFi or data. You can be almost anywhere and have access to virtually any item at any time.

The web does not have a closing time like a regular store. Because of technological

advancement, smartphones are nearly as powerful as computers. The mobile phone providers

like AT&T and Verizon have built massive networks so that the speed at which information can

be received and sent also make mobility and e-commerce more successful. Data shows that in

2018, mobile e-commerce totaled $137 billion and year-to-year growth from 2017 is 38.6%

(Keyes, 2018). By 2020, it is estimated that 40% of e-commerce will be made on mobile devices

(Thimothy, 2017).

Ecommerce is also very active in the entertainment and service industries. It is much

better to use subscription based companies such as Netflix over a company like Blockbuster

where you had to drive and purchase or rent a video tape. Netflix has a digital library of videos

that does not have to be stocked and do not break. The customer does not have to worry about
 Sposato 3

returning a video that is available through subscription service. Ever since the industrial

revolution, we have always found easier ways to do and make things

Banking is another area that has being transformed by e-commerce. Bank customers do

not have to go to the bank or an ATM to deposit a check since they can use an app like Venmo.

These apps even let you send money to a friend so you do not have to worry about having cash

or even a credit card. Financial companies also apps that you buy and sell stock from a mobile

device.

E-commerce will grow because it more easily captures an international market. In fact,

countries like China will likely become the leader or biggest market for e-commerce (Orendorff,

2019). China and India have much larger populations than the United States and the potential

buying power is enormous.

E-commerce will also see growth because it fits with other social media platforms and

branding (Orendorff, 2019). This is especially the case with younger people who are growing up

with mobile devices. Many celebrities who have major amounts of followers are paid to use

their influence to sell things (Orendorff, 2019). This cannot be done in the same at a traditional

store. Consumers are still looking for value and the impact of social media influences will likely

be limited or change in the future (Orendorff, 2019).

Another one of the big reasons for the growth of e-commerce is the rise of Artificial

Intelligence or AI, which shapes the way interact with our mobile devices and computers.

Understanding how AI works with e-commerce is important to why it will likely continue to

grow and expand (Naveen, 2018).

The four ways Artificial Intelligence is impacting e-commerce are: chatbots, predictive

sales, recommendation engines, and warehouse automation (Naveen, 2018). Chatbots are found
 Sposato 4

on the home page of e-commerce websites and mobile apps and are programmed to “talk” or

communicate with a customer through voice or text in a relatively real life manner (Naveen,

2018). Chatbots are very important and can assist the consumer with purchases the right product,

checking product availability, and purchasing (Naveen, 2018).

The second feature of AI that is impacting e-commerce is predictive sales, which is a

“deep learning” statistical programming methodology that uses algorithms to manage and use

very large data sets (Naveen, 2018). The importance of predictive sales is to measure the

customer’s behavior. It also helps to provide data on what product will be in demand and how to

manage inventory (Naveen, 2018).

Thirdly, AI uses recommendation engines to identify their target audience (Naveen,

2018). Recommendation engines use AI algorithms in web search that record critical details on

how a product is being searched. The recommendation engine then uses its finding to determine

what appeals to the customers searches (Naveen, 2018).

The fourth aspect of AI that impacts e-commerce is warehouse automation, which is

major focus of e-retail businesses (Naveen, 2018). Warehouse automation describes a facility

where the tasks for storing, retrieving, and moving inventory for a company are carried out by

automated systems (Naveen, 2018). Warehouse automation helps determine the trend of sales for

a company and can increase the speed and efficiency of operations (Naveen, 2018).

E-commerce is not just between a company and a customer, but between customers.

One of the biggest advancements for e-commerce has been business-to-business or B2B.

Business-to business commerce is trading or selling products or services between businesses

through online technology (Carter, 2018). Overall it is used to improve the efficiency for

companies. Business-to-business e-commerce has exploded. According to Jary Carter, “With

business e-commerce in the U.S. on track to hit $1.2 trillion by 2021.” (Carter, 2018). One of the

reasons to believe business to business commerce has grown is because nearly half of the owners

of these B2B companies are millennials (Carter, 2018). Also, buyers are continuing to get

younger, they are also becoming more mobile (Carter, 2018).

Based on this research, it is very likely that e-commerce will continue to expand and

change. Nearly all areas of business and trade are being impacted by e-commerce. Many

traditional retail companies that have relied on brick-and-mortar stores will have to change as

well. If they do not change, they will likely go bankrupt or be bought by a company that is more

technologically advanced. There will be a great focus the buying experience versus just the

transaction. With the development of AI, e-commerce will become more experiential, engaging,

and personal.
 Sposato 6

Works Citied

Timothy, Solomon. “The Future Of E-Commerce: Are You In Or Are You Out?” Forbes, Forbes

Magazine, 17 Jul. 2017, https://www.forbes.com/sites/theyec/2017/07/17/the-future-

of-e-commerce-are-you-in-or-are-you-out/#6099823237d8. Accessed 2 Apr. 2019

Keyes, Daniel. “Revisiting Business Insider Intelligence's 2018 e-Commerce Predictions - Here's

How They Turned Out.” Business Insider, Business Insider, 27 Dec. 2018,

https://www.businessinsider.com/business-insider-intelligence-2018-ecommerce-

predictions-2018-12. Accessed 2 Apr. 2019

Orendorff, Aaron. “Global Ecommerce Statistics and Trends to Launch Your Business Beyond

Borders.” Shopifyplus, Shopify, 13 Feb. 2019.

https://www.shopify.com/enterprise/global-ecommerce-statistics. Accessed 2 Apr. 2019.

Joshi, Naveen. “4 Powerful Ways Artificial Intelligence is Molding E-Commerce”, Forbes,

Forbes Magazine, 5 Aug. 2018.

https://www.forbes.com/sites/cognitiveworld/2018/08/05/4-powerful-ways-

artificial-intelligence-is-molding-e-commerce/#3bfa94a74b11. Accessed 12 Mar.

2019.
 Sposato 7

Carter, Jary. Perspectives “B2B E-Commerce Trends To Take Notice Of In 2018.” Forbes,

Forbes Magazine, 15 Feb. 2018.

https://www.forbes.com/sites/theyec/2018/02/15/b2b-e-commerce-trends-to-take-notice-of-

in-2018/#1e4584c47339. Accessed 2 Apr. 2019