Economic Impact of ECommerce

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Economic Impact of E-Commerce

• Pamela J. Brown, Ph.D.
• Associate Professor and Extension
  Entrepreneurship Specialist
• Texas Cooperative Extension
• Texas AM University System

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Economic Impact

• The DIFFERENCE ecommerce makes in business and
  family income, community, policy, and
  international trade.
• Ecommerce sales 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, email, or other online
  system.
• Source U.S. Dept of Commerce News, Feb. 24, 2005

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Demand
Results
Competition
Government
New
Jobs
Opportunities
Innovation
Local
Distance
Time
Regional
Customers
National
Global
Source Forrester, Innovation Works, June 2004
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Facts

• U.S.
• 37 over 2000
• 81 of teens
• 63 of adults
• 18-29 -80
• 30-39 -74
• 50-64 -60
• 65 -26
• 60 women
• 66 men
• Ethnicity
• Whites -68
• Blacks -42
• Hispanics -60
• Sourcewww.pewinternet.com

• Globe 445 Million
• World home use .51
• U.S.
• German
• United Kingdom
• France
• Australia
• Spain
• Sweden
• Switzerland
• Hong Kong
• Source www.clickz.com

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U.S. Economic Impact

• E-commerce sales 2004
• 69.2 Billion
• 23.5 increase from 2003
• 69.2 Billion
• Retail sales 2004 up 7.8
• 1.9 of total sales (2003 1.6)

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The New Normal American Way of Life
Total U.S. online gt70 million
Source PewInternet.org, 2005
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Impact on Business

• Conducting business
• Costs
• Profit
• Time

• Customer relations
• Employees
• Vendors
• Policy

E-business is saving AND selling!
Source Access Minnesota, 2005
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What Do E-Customers Want ?Why does it matter?

• Segmenting customers
• Young females
• Males 18-35
• Older adults
• Minorities
• Demographics will change!

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Changing Demographics
Broadband access will change who and how
Internet is used
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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 Email
Customer Service, 2005
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E-Loyalty Is it real?

• Multiple retailers
• Price
• Good service
• Emotional connection/loyalty
• Relevance to customers
• Keep customer as central focus of e-commerce

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How 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

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E-commerce class clientele say

• Learned more than I thought I would.
• Left with more knowledge than I had expected.
• Understand web page set up and costs.
• The hands-on helps me feel confident.
• I have a plan now!

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Community level implications
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Examples of Success

• State-specific examples

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What does it mean for YOU/Extension?
Educational Opportunity