Ecommerce is exploding!
The latest numbers from the holiday season are hot off the press and it’s once again great news for online business channels.
The holiday season of 2016, which ran from November 1 through December 31, totalled online sales of $91.7 billion* which is an astonishing 11% increase from 2015. (*According to Adobe Insights).
This is more evidence that ecommerce, which was once called the retail model of the future, has become the retail model of the present. Further, nearly all of the growth in the retail sector now takes place in online sales.
The Amazon Effect
Have you heard of the term The Amazon Effect? It’s Amazon’s skillful ability to grab market share from department, apparel, sports, outdoors, and other brick-and-mortar stores. It’s crippling the big box stores who are trying to keep up in ecommerce.
Macy’s is only the beginning. Retail sales for Kohl’s, Sears, Kmart, JC Penny, and Nordstrom also plummeted last year. In fact, Sears just announced today that they’re selling their flagship Craftsman brand to Black & Decker in order to raise cash to stay afloat.
In short, internet retail sales are booming while brick & mortar store sales are in a free fall. But what’s bad news for brick-and-mortar is great news for us in ecommerce. According to eMarketer data ecommerce sales are on their way to nearly $700 billion by the year 2020.
The Affiliate Marketing Segment
In the first quarter of 2016 I wrote an article referencing an affiliate marketing sales forecast done by Rakuten Marketing commissioned to Forrester Consulting. According to the study, the affiliate marketing space has matured into a significant channel for driving sales for advertisers of all sizes. US affiliate marketing spend will increase by a compound annual growth rate (CAGR) of 10.1 percent between 2015 and 2020, to an estimated $6.8 billion industry.
Nearly $7 billion. That’s our share.
What it means is that not only is affiliate marketing here to stay, but is still a long ways from reaching its potential. This is great news for us. Wouldn’t you like to get your small slice of the $7 billion dollar pie? Affiliate marketing is still a level playing field meaning anyone can succeed at it.
Those are just my observations and predictions. Here are a few snippets of some other opinions on this year’s affiliate marketing trends from ecommerce insiders, affiliate marketers, and industry experts:
- “In 2017, I predict the affiliate marketing industry will see a continuation of the mergers & acquisitions which we saw in 2016”. – Eric Nagel, affiliate marketer
- “As more and more consumers tend to move between different devices on a daily basis, the importance of cross-device tracking has become clearer. This really is one of the most important affiliate marketing trends you’ve gotta watch out for!” – Xavier Santana from academy.mobidea.com
- “Monitoring and compliance automation will gain further traction. Brands will be penalized for not meeting regulatory requirements”. – David Naffziger from Brand Verity
- “I believe that 2017 will bring continued advances in the performance marketing channel. My top three picks that will have the biggest impact for the performance marketing industry are cross-device tracking, cross-channel insights, and non-traditional partnerships.” – Todd Crawford from Impact Radius
- “Affiliate companies can be expected to focus on the ‘Refer-A-Friend’ model which will not only help them tap into a larger customer base but also reduce cost per acquisition.” – Rohan Bhargava – Co-founder – Hiring VP Engineering and Other Tech Roles
While ecommerce (including affiliate marketing) is still very much in its embryonic stages, it has proven to be a formidable weapon in retail sales. In fact, so much so that it’s literally strangling to death some of the department store retail giants who’ve struggled to adapt to this new way of selling to consumers.
I believe that we are still early pioneers in ecommerce and have only scratched the surface of its potential. To those of us already on board, it will surely be a wonderful ride!
And if you’re still not on board… Now is the time to jump on!
What are your thoughts? Please comment below.