Making the Case for E-Commerce (i.e., Amazon) in 2011

Amazon has one really big thing going for it that others don’t: Its size.

Being the largest e-commerce company is an obvious barrier to entry, but there are at least two opportunities in 2011 that will drive even more traffic to its site and others: Social and mobile.

A 78-page presentation by J.P. Morgan on the Internet Sector Outlook of 2011, which focuses a lot on the e-commerce market, predicts that the big losers will be physical retailers as more spending shifts online.

If you’ve been reading eMoney, you already knew this. Last month, we referred to these trends as the so-lo-mo trifecta, referencing the impact of social, local and mobile on e-commerce.

In 2010, J.P. Morgan found that nearly 8 percent of Amazon’s traffic was coming from Facebook, compared to 20 percent coming from Google, and that e-commerce revenues are expected to grow by 13.2 percent in 2011.

But as more consumers discover products and services through social networks, like Facebook, and compare prices on their smartphones in stores, traditional brick-and-mortars will lose market share and face bankruptcy, J.P. Morgan concludes. (It’s a small coincidence that Macy’s said it expects to add about 725 new positions over the next two years to beef up its Macy’s and Bloomingdale’s Web sites).

Here’s how J.P. Morgan makes the case for the future of e-commerce:

–U.S. e-commerce revenues totaled $28 billion in 2000, soaring to $166 billion in 2010. Revenues are expected to grow by 13.2 percent in the U.S. this year alone.

–In 2010, 36 percent of people said they bought something online at least once a month. Slightly less, or 32 percent of people, said they purchased one to two items online a month. However, less than 2 percent of folks bought more than 10 items a month.

–Traffic to Amazon’s sites is increasingly coming from Facebook, jumping 328 percent over the past year to almost 8 percent. That compares to almost 20 percent of referrals coming from Google.

–Facebook is driving less traffic to eBay than to Amazon, or roughly 4.7 percent, compared to 11.4 percent from Google.

–E-Commerce 2011 Top Picks: Amazon, Priceline and Latin American e-commerce provider MercadoLibre.


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Another gadget you don’t really need. Will not work once you get it home. New model out in 4 weeks. Battery life is too short to be of any use.

— From the fact sheet for a fake product entitled Useless Plasticbox 1.2 (an actual empty plastic box) placed in L.A.-area Best Buy stores by an artist called Plastic Jesus