U.S. E-Tailing Business Information Report

E-Tailing Industry

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Internet retailing or e-tailing industry continues to experience significant revenue and structural growth, despite the global economic downturn that occurred over the last six years and lingers today. One of the primary catalysts of this industry’s continued growth is the continued reliance on multichannel retailing and online multichannel management by retailers, who are increasingly relying on these frameworks to accelerate product lifecycles (Keh, Shieh, 73, 74). The ability to orchestrate these many online e-tailing channels across social networks is also changing the nature Internet retailing, accelerated by the intensive use of analytics for real-time reporting of transactions (Ling, Choon, Chai, Piew, 63, 64). The intent of this analysis is to define the U.S. market for e-tailing in terms of its market size, growth trends, and areas of consumer products in which online selling is pervasive and growing. In addition there are industries mentioned that are also not well-suited for e-tailing, and those are also mentioned in the context of this report. The critical success factors, advantages and disadvantages are also discussed in this analysis.

Analysis of the U.S. E-Tailing Industry

The e-tailing industry in the United States continues to be one of the most recession-resilient there is, as this industry grew at a compound annual growth rate of 10.4% from 2007 to 2012, and is valued today at $219.2B (Doherty, Ellis-Chadwick, 945, 46). DataMonitor and IBIS World, two market research firms specializing in quantifying the competitive dynamics and growth of the e-tailing industry, have projected $14.9B in profits on $219.2B in sales, with 52,969 businesses operating in this entire industry through the close of 2013 (Doherty, Ellis-Chadwick, 963, 65). Industry growth is projected to stabilize at 8.8% through the forecast period of 2012 to 2017(Doherty, Ellis-Chadwick, 944, 45). Amazon has 12.1% of the e-tailing market today in the U.S., and is the market share leader, followed by eBay with 2.4%.

The most significant market trends affecting this market include the continued stabilization of per capita disposable income, percentage of households who have a personal computer and increasingly smartphones and tablet PCs, the continued growth of the consumer sentiment index, and the pervasive availability and adoption of broadband throughout homes, public meeting areas and in some cases, across entire metro areas (Ling, Choon, Chai, Piew, 64, 65). All of these factors taken together create a profitable platform for current and future e-tailing growth. The majority of these factors are also well-suited for consumer products that can be quickly sold online and shipped at a relatively low cost. These include products and services, with airline tickets, travel packages, rental cars, and tickets to sporting and entertainment events also being examples of products easily packaged and sold online (Keh, Shieh, 76, 77). These items have a relatively simple fulfillment process associated with them; there is not much of a cost associated with getting them to the consumer vs. heavy, costly products to produce and ship including home appliances and furnishings. These items are not well-suited for e-tailing given the costs associated with fulfillment, in addition to the very high costs of returns in the event a customer’s expectations aren’t exactly met.

As e-tailers become more adept at managing the many channels that are available to sell through using social media, in addition to the insights gained using advanced analytics, it is becoming easier to create, sell and service customized products. Dell’s initial efforts at creating build-to-order personal computers did more than just revolutionize e-tailing, this strategy showed how critical supply chain synchronization to e-tailing is and how quickly it is accelerating (Doherty, Ellis-Chadwick, 956, 57). This paradox is also evident in how quickly traditional brick-and-mortar retailers shifted to also support e-tailing with increased emphasis as supply chain planning software and processes increasingly made build-to-order and customized product development possible

(Keh, Shieh, 73, 74). The long-term implications of greater mass customization product sold through e-tailing are the continual streamlining and perfecting of supply chain management and optimization (Ling, Choon, Chai, Piew, 74, 75). In conjunction with this development will be the continual adoption of social media into the e-tailing customer experience, enriching it with a continual stream of high quality content (Doherty, Ellis-Chadwick, 944, 45).


The future of e-tailing will continue to accelerate towards a more multichannel platform as consumers are choosing a greater depth and breadth of channels to learn and buy products through. E-tailing will also continue to benefit from the analytics and advanced reporting of transactions across all channels of an e-tailing system in real-time as well. The future of this industry will continue to show significant promise as Web-based technologies are providing a more accurate picture of the consumer than ever before.

Works Cited

Doherty, Neil F., and Fiona Ellis-Chadwick. “Internet Retailing: The Past, the Present and the Future.” International Journal of Retail & Distribution Management 38.11 (2010): 943-65.

Keh, Hean Tat, and Elain Shieh. “Online Grocery Retailing: Success Factors and Potential Pitfalls.” Business horizons 44.4 (2001): 73-83.

Ling, Kwek Choon, Lau Teck Chai, and Tan Hoi Piew. “The Effects of Shopping Orientations, Online Trust and Prior Online Purchase Experience Toward Customers’ Online Purchase Intention.” International Business Research 3.3 (2010): 63-76.

Min, Hokey, and Seong Jong Joo. “Evaluating the Comparative Efficiency of e-Tailing Ventures using Data Envelopment Analysis.” International Journal of Electronic Business 6.2 (2008): 194.