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The Psychology of Online Shopping: Why Online Shopping Is Growing, Why It Is So Popular and How Much It Makes

Updated on January 9, 2018
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Tamara Wilhite is a technical writer, industrial engineer, mother of two, and published sci-fi and horror author.

How Much Made Is Made in Online Shopping?

According to Statistia.com, by the end of 2015, business to consumer ecommerce sales worldwide were 1,471 billion dollars, or just under a trillion and a half dollars. Business to consumer sales in the US were $703 billion of that amount, but China and the Asian market in general are rapidly growing.

How Many People Shop Online in a Year?

The first item sold online was a Sting album in 1994. According to an August 12, 2014 article by the Daily Mail, one in four Brits shopped online at least once a week. And that percentage is slated to grow. Over half of all website visits are now via mobile devices, and the younger generation is more accustomed to surfing the web as they commute and shop. As of 2014, the Daily Mail said one in twenty Brits said their morning commute included some virtual window shopping.

Business Insider reported that 198 million Americans had bought something online by the first quarter of 2014. That was approximately 80% of all Americans over the age of 15. And Comscore’s first quarter 2015 said that total digital ecommerce was up 14% over first quarter 2015. Those figures will only grow as the percentage of the population that grew up with the internet become a larger percentage of the consumer market.

Why Is Online Shopping So Popular?

The first reason is convenience. You can order something from a site and have it delivered to your home. While online delivery initially took up to a week to deliver something to your home, Amazon Prime offered two day delivery for subscribers and now in one hour delivery for those in a number of major metropolitan areas. There’s no need to fight traffic, wait in line or worry about whether the store has it in stock. Deliveries to your home also reduce the risk of being accosted, though packages may still be stolen off a doorstep instead of swiped from an unlocked car.

According to CPCstrategy.com, in 2013, three quarters of customers surveyed said they shopped online to save time, while three fifths said they did it because of how easy it was to compare prices. Two thirds stated that online shopping gave the more options, while just over half said they could find lower prices online. A third found that they paid lower taxes online, though many states are closing the sales tax revenue gap with online retailers like Amazon.com.

Apps make on the go shopping even more convenient, improving the odds of online shopping likely. Think of Starbuck’s order ahead app, and the odds that Starbucks’ most loyal customers will buy even more of the product now that the wait time is reduced.

Ecommerce allows small businesses to reach far more people than casual passerby - as well as market more effectively to those in the area.
Ecommerce allows small businesses to reach far more people than casual passerby - as well as market more effectively to those in the area. | Source

How Do Ecommerce Sites Entice People to Buy?

A 2013 survey by UPS reported by the Wall Street Journal stated that over half of smart phone users and 60% of tablet users wanted to receive deals and promotions on their devices based on their location or transaction history.

Ecommerce sites and small businesses have dramatically increased location based marketing and promotions since then. Ecommerce sites have far more data mining resources at their disposal to find correlations and send personalized deals to customers who haven’t placed orders for a while, as well as offering related products at competitive prices that increase the odds of follow up orders.

Location based marketing has exploded, allowing businesses to offer short term discounts for regular customers in the immediate area to fill a restaurant after the party room is unexpectedly cancelled. Businesses are using apps on their user’s devices to build brand loyalty. These apps let retailers offer smartphone based coupons that cost nothing to produce and distribute, send loyal customers coupons as rewards for repeat business, generate tailored digital coupons for those who haven’t shopped with the retailer for a while, directly reward those who engage in digital word of mouth marketing with deals and track user activity with both the app and website in incredible detail.

How Competitive Is Ecommerce?

Ecommerce is highly competitive, but that doesn’t mean it is lost to small retailers. For example, small retailers and individuals can sell items on Amazon.com and eBay far more easily than trying to get Walmart to put their product on the shelves.

Ecommerce is more competitive than capturing a share of drive-by traffic because you are competing with online rivals around the world who can send their products via mail to the same consumers.

What Are The Most Successful Ecommerce Sites?

As of the second quarter of 2015, Amazon.com was the top ecommerce site in terms of sales, with $79.48 billion according to Statista. Its total web sales was around 60 billion in 2013, with the next 49 competitors total bringing in twice as much. Ebay had revenue of around 18 billion in 2014. Alibaba, the Chinese e-retailer, had more sales than eBay and Amazon together. It had $240 billion in reported sales in 2014.

References

“The Surprising Demographics of Who Shops Online and On Mobile”, Business Insider, 02/23/2015

“More Consumers Prefer Online Shopping”, Wall Street Journal, 06/03/2013

How to Compete with Amazon, Fortune Magazine, 10/24/2013

“How Many People Shop Online?” CPC Strategy, 08/09/2013

“State of the U.S. Online Retail Economy in Q1 2015” by Comscore

Comments

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  • Lipnancy profile image

    Nancy Yager 

    5 years ago from Hamburg, New York

    Online shopping is just so darn convenient. No lines, no grumpy customers or salespeople and to top it off, it is delivered to my door for free.

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