E-commerce is still less than 5% of retail sales -- huge growth opportunity | Hacker News Reader

E-commerce is still less than 5% of retail sales -- huge growth opportunity

splatf.com

35 pointsfromedome19 comments

Over half of "retail sales" fall into: Motor Vehicle sales, Building Materials, Gasoline, Food Service(restaurant/bar), Food(Grocery). I don't see online retailers making significant headway in those areas.

Hmm

Don't most of these already have e-commerce businesses related to them?

related yes, but not directly involved. cars.com is advertising because you still drive to the dealership to buy the car. You research appliances or siding online but you get them at HomeDepot. You print your grocery coupons from a website but you buy your milk/cheese/eggs/cereal/etc. from $LocalGrocer. And as mentioned elsewhere, you will not be buying gasoline over the internet anytime soon.

Well in Denmark at least there are several online groceries doing very well with delivery directly to the door.

Also services like Waitersonwheels and in Europe justeat.com deliver restaurant food directly to your door.

With regards to cars the it's the transaction between buyer and seller thats important.

I also seem to remember that several homedepot shops in europe are doing pretty well.

With regards to gazoline then sure but that still leaves a lot of other areas well served.

I think you are setting up some fake boundaries with regards to what constitute e-commerce in most of those areas.

In the UK online grocery shopping is actually pretty sizeable, especially amongst the younger people. All the major brands provide the service. Anecdotal but I know a number of people who bought their car off of eBay. I have no counterexamples against everything else but except for gasoline, which is hard to imagine working out, just because things have always been a certain way does not mean they will continue to be so.

You research appliances online but you get them at HomeDepot.

Expect that to change fast. In fact, a lot of people already do the opposite. They go to stores to look at the thing and then order online because it's cheaper.

"According to comScore, non-travel/auto/gas/food e-commerce sales represented just 7.1% of total retail sales in the US in Q2 2010. But, significantly, online sales have grown at an annualized rate of 9.7% since 2006 (vs. the 2.3% annualized decline in total retail sales over that same period, which includes the Great Recession). Leading online retailers, like Amazon.com, are growing even faster—30% per year for the past several years. This growth in e-commerce should only accelerate."

http://www.adventurista.com/2010/09/bessemers-top-10-laws-of...

I appreciate the blurb but my point is Amazon.com will not be selling gasoline over the internet. Nor will your monthly Costco run be replaced by a giant insulated box delivered by UPS.

Yes online retail is a small and growing portion of the retail sales market and the market is large but it is not as large as some might think.

It's more efficient for someone to deliver that box from Costco to several houses close to each other than it is for several people to all drive to Costco. When most people visited several stores then driving into town was more efficient but the big box stores really change that equation.

EX: Giant home delivery is not free, but compare how much it costs to drive to the store and do the shopping yourself and it quickly comes out significantly ahead.

Not to split hairs, but I think it's interesting: If you drive somewhere to pick up, you pay cost of transportation, while if they deliver, they'd pay that cost. Therefore, the delivery service might raise prices making consumers believe that driving to get it yourself is a better deal. Kind of like the guys willing to drive 300 miles to save $500 on buying a car, I find people often underestimate the opportunity/transaction costs of purchases made in person.

You could sell gasoline over the internet. A tanker could find your car and fill it up overnight sometime as the delivery mechanism. In urban areas this might be more efficient than gas stations...

Most of the major supermarkets here in the UK sell groceries online and they're surprisingly good at it. My wife and I love it because it is reliable, convenient and cheaper. I expect more and more people will start buying groceries online.

I would love to buy my groceries online and just have to pickup a box at the store, but I would properly spend a lot less then, since I would only buy what I was interested in.

Yup. But it's not nearly as cool with the hipster kiddos, or the venture capitalists who cater to them, as social/mobile/photo/videos are. Meanwhile, we are in the distant background, building solid businesses.

I am actually surprised to see this make it to HN.

wow. ties.com & scarves.com. Impressed - the domains alone must be worth a bomb.

In the UK I see a number of large e-tail brands fighting to take the fashion/clothing market, e.g asos, net-a-porter + of course all the big b-n-m retailers now have fairly mature e-commerce channels. Do you really think there's still space in this market?

Absolutely. There are many mom and pop retailers who are doing many things wrong or inefficiently in this space, who are still surviving, even thriving. It is a target rich environment.

As someone who works for an eCommerce company and has a wife who shops online, absolutely. Whenever she tells me about how this company or that company has a bad shopping experience, I pass that along to our sales department. There are plenty of retail sites (certainly in clothing & fashion) that are running on platforms that are several years old, and would benefit from things like simplified checkout, ajax shopping carts, better integrated email marketing, abandoned cart campaigns, review follow-ups, etc.

Wow... impressive bio. I'd love to hear more about the retail internet space, do you have a blog? I feel like there isn't a lot of good info out there on how to operate at a moderate scale (i.e. you're not trying to be Amazon, but you're also not trying to sell one or two hand-made things on etsy either).

Retail has always been a bit of a turnoff since you need to have money tied up in inventory, deal with lots of physical stuff, etc... Growing up, my relatives had mail order and retail businesses. Dealing with all those physical things as well as people is very... messy. On the other hand, buying things, and selling them to other people is a centuries-old tested business model. No need to come up with an ground-breaking idea. Just need to execute (the hard part).

No blog, but if you have specific questions, you're welcome to email me - I just added my email address to my profile.

I understand the sentiment of retail being a turnoff because of the atoms vs bits issue. But something you may not realize is that there are tremendously difficult problems to solve in this space. You mention how "messy" it all is - and the problems associated with organizing and automating this mess are, in many ways, very enjoyable to solve with technology.

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