20 YEARS OF ONLINE RETAIL AND WHAT COMES NEXT
This month marks 20 years since what is believed to be the first secure internet shopping transaction took place, when in August 1994 a young man in the US purchased a Sting CD online at NetMarket.
In the subsequent two decades digital technology has revolutionised our daily lives - we can download the latest novel in under a minute, catch up on TV we missed at the touch of a button and can reach into our pockets and produce a more powerful computer than any desktop imaginable even ten years ago.
Though 20 years have passed; we are still only at the start of the revolution.
In 2005 there were 167m domestic internet connections worldwide – look forward to 2015 and that is expected to rise to over 2.7bn. Crucially, the nature of those internet connections are also changing. Ten years ago every one of those connections were fixed domestic lines. By next year over three quarters of global internet connections will be mobile.
I remember during the early days of e-commerce in the mid-90s – our proposition was a CD ROM – a tool for customers to take home and browse when the internet was a world of words and simple data. Advances in areas like bandwidth and compression technology mean the amount of data we are capable of sharing has exploded, resulting in an age where video is the currency of the internet and technologies like 3D printing are not that far away from having real commercial impact.
And the pace of consumer adoption is only getting quicker. The medium of radio took 38 years to reach an audience of 50million, TV took 13 years, the internet took four but WhatsApp surpassed that milestone in less than two years and now have over 50million users in India alone.
What does this mean for retailers?
The accessibility of the internet has unteathered the consumer putting them firmly in the driving seat, with competition coming from everywhere.
A good retailer has instinctively known what to look for in a property deal to secure a prime location. But, in an age where Google can drive 50% of traffic to a retail website, a Board that appreciates the dynamics of ‘Google high street’ – of search engine optimisation and digital marketing - is vital to success.
Competitive advantage in the digitalised world demands a commitment from the very top, not only to invest in the right infrastructure but to acquire the new skills of retail. We have to be more agile than ever before – this means creating teams that did not even exist five years ago, such as our Digital Lab. Comprised of Silicon round-about software developers and entrepreneurs from the start-up world, this team spends time with incubators such as SEEDCamp and WAYRA and uses their network to ensure M&S has access to the latest emerging technologies and exciting innovations.
Here in the UK we have the ingredients to lead that innovation; we have an advanced transport infrastructure, a high penetration of smart phone ownership, extensive 3G, and increasingly 4G, coverage and importantly, we are seen by many as the creative capital of the world – with a rich pool of technology and marketing talent.
No one can predict which trend to back. But that’s why it’s crucial to have the skills in-house to be able to build prototypes to test and trial new technologies – quickly and efficiently – so you can make informed decisions.
The one rule for me is that technologies will succeed if they make the customer experience better. Whilst technology moves at pace, human demands and desires do not change. The retailers who will succeed are those that harness technology to make shopping easier, more convenient and ultimately more inspirational for the customer.
This blog was first published on Retail Week.
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