The internet has grown in the last decade, so why hasn't e-commerce grown with it?

The internet has grown in the last decade, so why hasn’t e-commerce grown with it?

The last decade has brought new frontiers in measurement and attribution. But for The Drum’s deep dive into e-commerce, Journey Further’s James Addlestone argues that this got us addicted to short-term tweaking at the expense of what really matters.

Sure, we can make deliveries faster. We can access more products, more sizes and more brands. But has our online shopping experience become more enjoyable or more efficient? I am not convinced.

E-commerce has grown about 5.4 times in the last 10 years, from $1 trillion to $5.4 trillion. Hardly the sharpest insight, but bear with me. In 2012, there were just over 2 billion Internet users spending 83 minutes online per day. Now there are more than 5 billion, spending 192 minutes a day. That’s 166 billion internet hours to 960 billion internet hours. In 10 years.

The market has grown 6 times in 10 years, but e-commerce spending has not grown in line with Internet use.

Of course, there are many reasons: Low-income people surf the Internet, unable to match the spending of early adopters. General ‘Internet’ use cases have proliferated, with much more time spent on social media per user (up to 50% or so).

Fundamentally, we just haven’t really improved e-commerce over the last decade.

exploring the amazon

Look at a similar comparison of the Amazon website in 2012 vs 2022.

After around 3650 days of “optimization”, what differences do you notice? The site in 2022 is a bit cleaner and more elegant. The product has more pop and the navigation bar is… easier to navigate. But given that we live in a world where the only constant, we’re told, is that the world is changing faster than ever, and where (according to Gartner’s exaggerated curve) we’ve been inundated with industry-changing technology for the past decade , the improvement is disappointing at best.

Surely, though, given the millions Amazon spends on its data science capability, the UX and recommendation engine are much better and slicker.

A comparison of Amazon shopping screens between 2012 and 2022

The similarity is amazing. When Internet speeds are 5 times higher than in 2012; when photography is higher resolution and more accessible than ever; when we can record videos in 10k; when websites can be created with the push of a few buttons; when there is more competition, more investment, more data, better algorithms and more expertise available… we have spent a decade playing within the confines of what we believe to be best practice.

Why haven’t we done better?

E-commerce has made it (ostensibly) easier than ever to measure short term activity impacts. This has had far-reaching consequences.

It has made digital channels inherently focused on the short term. We have become addicted to A/B testing. There is a parallel universe where this makes decision making braver, creativity riskier and expansive ‘blue sky’ thinking, knowing that if the test fails we have learned something and can go back to the status quo. But this world has not materialized. The best experimenters understand the opportunity that A/B testing provides in the long run. They understand that a series of short-term tests will only help us reach local optima. Unfortunately, there is not an overabundance of the best experimenters.

This has absorbed investment from other “long-term” business areas. Why risk money on an untested radical change when we can actually test what works with our experimentation program?

We prefer to know, with certainty, that we have achieved a small-scale improvement than to commit to a genuine transformation.

Ours is a world geared towards short-termism, either through relatively short private equity tenures (around five years) or average CEO tenures (4.8 years for the FTSE 100). .

Why I’m (surprisingly) optimistic about the future

We are beginning to take a more scientific, field-based approach to assessing the impact of short versus long term. Take Binet and Field’s The Long and the Short of It as an example: in 2013 they empirically showed that investing around 60% in longer-term brand marketing generally provides optimal results.

This empirical evidence is finally emerging. As more field research is conducted, we will be able to make a more compelling case for business owners about increased transformation risks.

Meanwhile, challengers are beginning to disrupt the market, potentially forcing a shift in the e-commerce giants’ mindset from ‘if it ain’t broke, don’t fix it’ to a genuine need change. For example, we’re seeing more people use video-rich platforms like TikTok as search engines. We will start to see more video-rich interactive content being used to help us navigate through e-commerce sites as competitors envision different ways customers can fundamentally interact with content.

James Genchi, UX Design Lead at Journey Further, tells me that we’re starting to see retailers reimagine how we use available data to revolutionize shopping. Not necessarily more data or ‘AI’, just better customer-centric use cases. Take Thread or Stitch-fix: online marketplaces that actually save users time and energy with curated lists based on individual preferences.

I hope to see a shift from efficiency to experience; e-commerce that offers fewer options but more clarity. We will see more exciting product images; the ability to interrogate products with greater fidelity; and (at some point) the ability to dive into some form of metaverse to ‘try on’ different clothing items from different retailers.

The future looks bright. I sincerely hope that 10 years from now I’ll look back at 2022 and laugh at our terribly boring and functional eCommerce sites.

For more insights into the future of online sales, head over to our in-depth eCommerce hub.

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