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The E-Commerce Slowdown of 2016

Posted on 6.13.2016

The heyday of e-commerce might be coming to an end.

The overall move to online shopping is expected to slow considerably over the next three years according to recent consumer research released by The Boston Consulting Group (BCG).

Even though more than three-quarters of Americans, ranging in age from 15 to 85, have bought something from Amazon.com in the last year, in nearly every product category and among every age group, consumers indicated they will not increase their online shopping.


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According to the official announcement,

"In 41 categories, from athletic apparel and pet supplies to insurance products and consumer electronics, the vast majority of Americans surveyed -- 78 percent to 92 percent, depending on the category -- said they don't plan to increase their online spending over the next three years. And in many categories -- including baby products and food, beverages, fine jewelry, news and magazines, cars and packages goods -- more than a quarter of those already shopping online said they will spend less online in the future."

In short, more than twice as many people say they'll spend less online over the next three years than those who say they'll spend more online. The intention to keep online shopping at current levels and slow down in many categories is virtually identical among Millennials, Gen-Xers and Baby Boomers according to BCG.

"Consumers are notoriously unable to predict their spending patterns," said BCG Senior Partner Michael J. Silverstein, an expert on consumer behavior and retail and packaged-goods innovation.

"However, the findings from this research certainly pour cold water on everyone's expectations for a continuously rising e-commerce world. E-commerce winners will have to earn new dollars and new spending by providing new value. That means me-too players will suffer -- and leaders will need to provide more user-friendly websites, lower prices and offers tailored to individuals customers."

"E-commerce is a channel, like any form of distribution: growth does not continue at a rapid, double-digit rate forever. Most consumer categories have been available online for several years. The 'newness' is gone, and we're looking at mature levels of penetration in many categories," continued Silverstein. "Right now, online shopping growth is similar to the growth experienced in the 1970s and 1980s by catalog merchants. E-commerce has provided incredible value, enhanced competition and forced land-based retailers to improve their game. But consumers right now are saying, 'I'm happy with my current options,'" he added.

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