Downturn Signals New Era for E-Commerce Development

The current economic situation may mark a new phase in the emergence of e-commerce development, and executives need the right e-commerce responses. When sales at brick-and-mortar storefronts but are climbing online, budgets need to be adjusted appropriately.

The current economic downturn is an important test for e-commerce development. The past decade has seen a period of extraordinary growth for e-commerce, and to some extent in business a rising tide does help to float all boats. Slower growth periods sharpen the distincition between truly insightful strategies and those of the run-of-the-mill variety. Indeed, the downturn and the slow recovery that is expected to follow may threaten the viability of some e-commerce approaches and participants.

The onset of leaner times--really, for the first time since e-commerce matured--should not imply that this is a time to be defensive. Rather, there is reason to believe that the more assertive e-commerce strategies will be the successful ones.

E-Commerce Development Trends: A Glass Half Full

Ultimately, the tale of e-commerce will be told by sales figures, but one way to anticipate where sales trends may be headed is to see how major advertisers allocate their dollars.

E-commerce spending projections are all over the map. One survey showed that 76 percent of executives expected to increase their Internet marketing budgets in 2009, but this forecast was belied by a 5 percent year-over-year decline in Internet advertising spending, through the first quarter of 2009. Meanwhile, a Microsoft executive forecast that online ad growth would be flat till 2012.

E-Commerce Web Sites Pick Up Drawing Power

The real issue is not whether Internet ad spending will be slightly up or slightly down in the near future. Those calls for close-to-flat growth are in sharp contrast with the ad revenue declines of 20 percent or more for traditional media such as radio, newspapers, and even television.

In short, the Internet is gaining market share, and as the audience grows, it is becoming broader. Middle-aged men spend more hours online than any other group, and usage by women is catching up.

Implications for E-Commerce Web Site Design and Development

These trends have important implications for e-commerce development projects:

• This is a good time to put money into e-commerce development. Not only is e-commerce proving more resiliant than traditional media, but prices and scheduling for services like e-commerce web site design should be more favorable than ever.
• Budget share for e-commerce development should reflect the new reality. Budgets tend to be set as incremental adjustments to prior years budgets, but every now and then it can be constructive to zero everything out and start fresh. Coincidentally, the current economic climate might make this exercise a necessity anyway. The benefit from the perspective of decisions about media dollars is that the power of different media--traditional and emerging--is changing too rapidly for incremental adjustments. The share of e-commerce development expenditures in a promotional budget should reflect that the medium has fully arrived as a major player.
• E-commerce Web site design should fit the audience. A starting point for any e-commerce development effort should be to forget the concept of an Internet generation--the medium has succeeded in reaching across age groups and gender lines. Critically, it is also as much a business tool as it is an instrument of play. Therefore, e-commerce Web site design should not be based on generalizations and cliches; it should be closely tailored to the projects target audience.

E-commerce isnt going anywhere. No matter what current market trends my show, companies of all sizes can benefit from e-commerce Web site development.

Sources

USA Today

Marketwire

SYS-CON Media

ClickZ