As 2019 comes to a close, it’s a good time to look back at a decade that was marked by remarkable change, not the least of which is eCommerce growth. Every year, new technologies made online shopping more accessible and more widely accepted.
Over the course of this decade of eCommerce growth, Amazon made two-day shipping the industry standard. As we close the decade, Amazon is pushing the speed of eCommerce shipping even faster, with one-day and even same-day delivery.
Increased consumer trust in online transactions has been one driver of eCommerce growth. The convenience of 24/7 shopping, the ability to buy hard-to-find or specialty items, and the ease of comparison shopping have all been factors in the continued growth of eCommerce sales during the past decade.
It may seem like 2010 was just yesterday. But in terms of technological change and eCommerce growth, it was a lifetime ago. Here’s a look back at some of the biggest changes of the past decade – the good, the bad, and the ugly.
ECommerce Growth by the Numbers
To get a perspective on eCommerce growth during the 2010s, it’s helpful to take a look at some numbers that tell the story.
In 2010, less than 5% of retail sales happened online. During this decade of eCommerce growth, that number more than doubled to 10.7%. US eCommerce sales more than tripled. Worldwide, eCommerce growth has been even more striking. Since 2010, global eCommerce sales have increased by a mind-boggling 600%.
Along with the widespread adoption of eCommerce came the stunning growth of two eCommerce platforms: Amazon and Alibaba. Although they are based in the US and China, respectively, these two online retail giants have expanded to reach consumers around the globe.
Amazon was not a fresh-faced startup in 2010. Founded in 1994 primarily as an online bookseller, Amazon had already expanded. The platform sold a range of products directly and through Marketplace sellers. Amazon’s sales were a healthy $34.2 billion. But founder Jeff Bezos wasn’t yet the richest man in the world – that would come later. In the 2010s, eCommerce growth pushed Amazon sales over a quarter of a trillion dollars.
The estimate of Amazon’s share of US online retail sales was downgraded from 47% to 38% this year. However, that’s still an impressive market share for a single online retailer. Amazon has grown into the force to be reckoned with in eCommerce.
Chinese online retailer Alibaba is smaller than Amazon, but it has experienced even greater expansion in the 2010s. Alibaba’s sales have grown by an astonishing 5,700% since 2010.
2010s in ECommerce — the Good, the Bad, and the Ugly
The eCommerce growth in the past decade is a story of technological innovation and societal change. Some of it has been good – or even great. But progress has brought new problems with it, too. Here are some of the highlights – good, bad, and downright ugly.
The Good: Smart Devices
One of the biggest areas of eCommerce growth has been shopping on mobile devices. More than three quarters of the US population owns a smartphone and almost 80% of smartphone owners have made a purchase on their phone in the last six months.
It’s hard to remember this now, but there was no iPad before 2010. The tablet had been around for almost a decade, but Apple showed consumers why this device was essential. Tablet computers proliferated and got more powerful in the 2010s.
This has been facilitated by new developments in secure online payment technology. PayPal has been around since 1998. Google introduced its mobile payment system, now called Google Pay, in 2011. In 2014, Apple Pay turned iPhones into mobile wallets. Venmo (launched in 2009) and Zelle (2017) gave people more ways to transfer money through mobile apps. Bitcoin surged in the 2010s, offering a new way to pay for online purchases.
In 2014, Amazon premiered the Echo, also known as Alexa. This voice-controlled device has changed the way we search and even shop. Alexa was followed by a host of other home assistants, including Google Home and Apple HomePod.
In addition, virtual reality (VR) and augmented reality (AR) allowed online retailers to add value to their virtual shops. This technology helps eCommerce come closer to the one big advantage that bricks-and-mortar stores still have: the touch factor. Swedish retailer IKEA has even created a VR app that allows people to design a kitchen using a VR gaming platform.
The Good: Social Media Contributes to ECommerce Growth
When the decade began, social media had been around for less than a decade. Twitter and Facebook existed. Myspace had already started and died. But Instagram and Snapchat didn’t emerge until the 2010s. This is the decade that saw a huge surge in the influence of social media around the globe.
Instagram is emblematic of the power of social media to drive online marketing. Founded in 2010, the visually-driven platform has become the home of influencers. It’s where brands connect to their customers. With 1 billion users a month, Instagram shows social media’s power to reach consumers.
Facebook reported $17.4 billion in advertising revenue in the third quarter of 2019. This includes revenue from Instagram, which Facebook owns. While the platform has generated controversy because of its ad policies, it provides an economical way for even small online marketers to reach target audiences.
The Good: Internet Shopping Holidays
Online shopping wasn’t invented in the 2010s and neither were online shopping holidays. The first Cyber Monday was on the Monday after Thanksgiving in 2005. However, new online shopping holidays proliferated in the past decade. So did online deals. That might be why, in 2019, sales on Cyber Monday topped the traditional bricks-and-mortar shopping holiday, Black Friday. Retailers saw $7.4 billion on Black Friday, while they raked in $9.4 billion on Cyber Monday.
The Bad: Security and Privacy
As more of life and shopping moved online in the past decade, crime followed. Retailers have not been immune from this problem. Target suffered a huge data breach in 2013. EBay was hacked in 2014. Hackers even penetrated Equifax, a company whose job is to safely handle personal data.
ECommerce was not just the target for hacking; it is also the bait. Thieves no longer have to take your wallet to use your credit cards. They can steal credit card information and use it to fraudulently order products online. Fraud detection and protection has not kept up with innovations in online crime.
Hacking isn’t the only issue related to internet privacy and security. Facebook’s use of personal data has come under fire. In addition, Facebook’s microtargeted advertising has led to charges that it allowed racial discrimination in marketing.
Online life grew in prominence in the 2010s, but it is still relatively young. The safeguards needed to protect people’s identities and security are not yet fully formed. However, the urgency of developing better protocols is evident. Strong investment in better online infrastructure is vital for continued eCommerce growth.
The Ugly: People Behind the Brands Pay the Price of ECommerce Growth
As Amazon and other retailers pushed for faster and faster order fulfillment, workers have paid the price. A recent headline in The Atlantic put it bluntly: Ruthless Quotas at Amazon Are Maiming Employees. The need for speed has left workers injured and even dead. The demand for free shipping and fierce price competition in online retail has depressed wages for warehouse employees. This has led to pushback from workers and consumers.
The good news is that the 2010s saw different business models developing for eCommerce warehouses. Some fulfillment companies have found that treating employees well is a good business model. Let’s hope there’s a lot more of that in the decade to come.