According to an ecommerce report released by the Virginia-based research firm ComScore, ecommerce spending rose 14% in the fourth quarter of 2011. U.S. online spending reached $161.5 billion last year, a 13% increase from 2010. One in every ten dollars of discretionary spending is now disposed on the internet. This ecommerce report spells good news for online retailers recovering from sales dips over the past two years. Convenience and price are widely accepted as the driving forces behind this ecommerce growth. Exploring specific behaviors contributing to last year's growth factors and building a business strategy around them will guarantee you a share of the success predicted in future ecommerce reports.

Last year marked a huge recovery in the ecommerce market. This comScore, Inc. ecommerce report gives online retailers confidence for 2012.

The Growth Of Retail Commerce Conducted Over The Internet


E-Commerce Spending ($ Millions)*

Y/Y Percent Change

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* The above table excludes items such as online purchases for travel, auctions, automobiles and purchases made by larger corporations.

Factors Influencing Reports Of eCommerce Growth

eCommerce reports of growth are an incomplete lot since there are many factors involved. However, when examining items behind this online shopping revolution, there are some clear drivers that seem to cut across many product lines, segments and business models. Here are a few of them:

Mobile Media

Millions of consumers use their Smartphones or tablets to make online purchases each year. Mobile media has broadened ecommerce landscape, and this convenience has fueled competitive pricing among both ecommerce retailers and brick and mortar stores. When customers shop in a store, they can use their mobile devices to browse the web and compare prices of items they are interested in purchasing. They can also download apps that scan barcodes to automatically filter this information for them.

Consumers no longer need to conduct research before they enter a store. This competition will continue to drive store prices to more competitive levels, putting power in the hands of the consumer. It may also continue to fuel online growth as more consumers use this on site "comparison shopping" power to determine what they want locally and then order it (often for less) online. (Look for some types of retaliatory activities such as local retailers helping their localities and state legislatures enact sales tax parity legislation. Also look for more online-local marriages like ordering online and fulfilling locally, already done by many chains. And of course, there will some good old fashion price matching by physical retailers for online pricing.)

The above ecommerce report illustrates the growing impact mobile media had on total consumer sales over the past two years with similar predictions for the next four.

Social eCommerce

Social media sites like Facebook and Twitter regularly converge hundreds of millions of people. eCommerce companies who take advantage of these platforms can communicate with their customers in a more regular and personal way. They can target ads to appear based on individuals' profile preferences and offer special deals, promotions, and contests to those who follow their business activity. As a result, these companies have reaped impressive profits.

This ecommerce report reveals the incredible revenue collected as a result of companies utilizing social media platforms to market their products. It predicts remarkable growth in this area over the next several years.

Source: Forrester Research; GP Bullhound; Euromonitor; Booz & Company analysis

Regular, Competitive Deals

The convenience of the internet and mobile media allows customers to become more informed about their purchases. They are more aware of whether or not they are getting a deal. For ecommerce businesses, these deals start with shipping. Dissatisfaction with shipping is the primary cause of shopping cart abandonment. Customers have come to expect free shipping, and 50% of them will switch sites if they encounter ones that don't offer it. ComScore's ecommerce report stated that last year 52% of online transactions included free shipping, up from 49% in 2010.

Sophisticated Merchandising

Online retailers have become creative with how they channel the capabilities of the internet. The more engaging the purchase experience and the more realistic the product representation, the more willing customers are to forfeit their money. eCommerce businesses that provide detailed information about their products give their customers a sense of confidence when they decide to buy. This marketing comes in the form of detailed product descriptions, customer reviews, and the incorporation of quality pictures and video.

Incorporating This eCommerce Report into Your Business Plan

No matter how large or small your business is, have a plan for steady growth. Don't make the mistake of losing customers because the workload overwhelms you. Having a plan to accommodate for each phase of a rapidly-changing ecommerce market is a wise thing to do.

Build Confidence

All of the ecommerce growth factors assume that customers feel safe with their purchases. Consumers must know they can trust you with their most personal information. Make sure to follow ecommerce best practices regarding customer confidence-building (guest checkouts and clearly posted product prices and shipping costs) and website security (current antivirus platforms, tight passwords, and SSL emails).

Ultracart is one example of a shopping cart platform that integrates SSL to protect users' sensitive information, a key element of the building of trust between customers and online merchants that is fueling digital sales growth

Excel in Customer Service

Outstanding customer service sets your business apart. If ecommerce reports show growth related to convenience and price, then you must make these factors the foundation of your business plan. Provide a customer service strategy that commits to speedy deliveries, hassle-free returns, courteous and available sales representatives, and special rewards for returning customers.

Evaluate your Plan

So you realize that you need to provide a creative, convenient shopping experience with competitive pricing through social and mobile media channels. But you can optimize this endeavor by evaluating how well your market knowledge is translating into sales.

Ask your customers about obstacles standing in the way of their purchases. The graphic above lists a few reasons internet users did not buy online in 2010.

Source: Forrester's Consumer Technographics® December 2004 North American Study

Use this ecommerce report to communicate with your consumer base. Determine if any of these factors hinder their willingness to make purchases and address these issues in your business plan. Finally, use your tracking tools like Google Analytics to monitor visitor traffic. This reveals demographic trends that will help you hone your business strategy to take advantage of these ecommerce growth factors.