For the e-commerce industry, 2008 was a challenging year, yet growth is still on par with last year, and it appears online store-owners are busier than ever meeting the demands of a maturing market. Here's a look at some of the issues and trends that marked the year, and will certainly continue to grab headlines in 2009.
Trying to Cash In on Social Sites
Perhaps the biggest conundrum of 2008 in regard to online sales was how to make a profit by marketing and selling on social networks such as Facebook. Widgets and special e-commerce applications abound for social networks, but so far, members seem to want to communicate more than they want to shop.
Still, word-of-mouth marketing is powerful, and research continues to cite the fact that consumers continue to share — and trust — information about products they gain through social networks, even if they aren't actually making purchases there. So, we're certain in the coming year we will see more services and technology designed to help online businesses both market and sell through these sites.
EBay Undergoes Huge Changes
For eBay, the past year was clearly tumultuous. We'll be running an in-depth story tomorrow on the changes that occurred at the venerable online marketplace in 2008, but no year-in-review would be complete without mentioning the shake-up at eBay. From Meg Whitman's departure, to unprecedented boycotts, to significant changes in the feedback, payment and shipping policies, it seems eBay is hardly the same company it was in 2007.
While both large and small sellers have scrambled to keep pace with all the new developments, eBay has instituted a new Power Seller program for high-volume sellers, and it appears the "Amazon-ification" of eBay is in full swing. Meanwhile, the "eBay alternative" sector is showing signs of life, indeed success, with snappy upstarts such as Bonanzle gaining traction — and traffic.
Shipping News
Another topic that continued to make news this year is shipping and whether or not offering free shipping is a smart marketing choice or a death knell for the bottom line.
Some industry watchers say shoppers expect free shipping, and not offering free shipping means you'll lose sales. On the other hand, many say there are other ways to offer delivery discounts that won't eat up profit margins and argue that customers are actually more willing to swap free shipping for other types of incentives. The debate is still alive and well, and while many e-tailers have found formulas that work for their individual business, we don't expect the discussion to go away in 2009.
Customer Reviews and Video Ads/Marketing
Customer reviews, once found only on high-volume sites, are now becoming mainstream as consumers increasingly expect them as a standard feature. The problem was that the technology for employing and managing customer reviews was often too expensive for small online store owners. With affordable plans created just for the small e-tailer being rolled out late in the year by PowerReviews, we expect that customer reviews will continue to be a hot topic in the e-commerce industry.
The current year also brought lots of improvements to online video ad and marketing for e-tailers. Start-ups such as Jivox offering small online business owners affordable D.I.Y. video ad making services showed up last year, but in 2008 they enhanced their features. For instance, now you can make a video and also place it in targeted ad networks that you can track with analytics as you would a pay-per-click campaign. In 2009 we should see if this becomes more mainstream as opposed to a trend for early adopters.
International Sales on Tap
As the market matures, it appears many e-tailers are more willing to go after the foreign customer base. Shipping management companies are offering more support for international e-commerce and PayPal just launched its own micro-site for this very purpose.
In October, the first Global eCommerce Summit was held in Amsterdam, the Netherlands, and Forrester reports that broadband in Europe, as well as Internet use on the whole, is significantly increasing, so this is certainly a trend to watch in 2009.
We here at Ecommerce-Guide.com are anticipating another exciting year full of challenges and rewards for the industry and wish you all a prosperous — and profitable — New Year.
Michelle Megna is managing editor of Ecommerce-Guide.com.
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