Economic Impact of
E-Commerce
Pamela J. Brown, Ph.D.
Associate Professor and Extension Entrepreneurship
Specialist
Texas Cooperative Extension
Texas A&M University System
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
Results
Demand
Innovation
Local
Regional
National
Global
Source: Forrester, Innovation Works, June 2004
Opportunities
Facts
• Globe – 445 Million
• World home use ^ .51%
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U.S.
German
United Kingdom
France
Australia
Spain
Sweden
Switzerland
Hong Kong
Source: www.clickz.com
• U.S.
– 37% over 2000
– 81% of teens
– 63% of adults
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18-29 -80%
30-39 -74%
50-64 -60%
65+ -26%
– 60% women
– 66% men
– Ethnicity
• Whites -68%
• Blacks -42%
• Hispanics -60%
Source:www.pewinternet.com
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%)
The ‘New Normal’ American Way of
Life
Total U.S. online:
>70 million
Source: PewInternet.org, 2005
Impact on Business
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Conducting business
Costs
Profit
Time
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Customer relations
Employees
Vendors
Policy
E-business is saving AND
selling!
Source: Access Minnesota, 2005
What Do E-Customers Want ?
Why does it matter?
Segmenting customers
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Young females
Males 18-35
Older adults
Minorities
Demographics will change!
Changing Demographics
Broadband access will change who
and how Internet is used
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
E-Loyalty: Is it real?
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Multiple retailers
Price
Good service
Emotional connection/loyalty
Relevance to customers
Keep customer as central focus
of e-commerce
How they are buying?
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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
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!
Community level implications
Resources
Education
Access
Examples of Success
• State-specific examples
What does it mean for
YOU/Extension?