I just attended the Internet Retailer show in Chicago. I was an attendee, not an exhibitor, which allowed me the ability to attend presentations and visit some of the key players in this mecca of direct to consumer shipping. Over 8,000 people attended the three-day conference. The mood of the conference was extremely optimistic. While the rest of the world is mired down in economic pessimism, Internet retail sales last November and December were 35.5 billion (according to the research service comScore) up 15% from a year ago. Parcel shipping saw a parallel gain — even more so when you include all of the returns that occurred in January (up 7.7% from a year ago, according to UPS). The global economic pessimism, and the optimism of internet retailers, was at the heart of one of the keynote presentations I was fortunate enough to attend.
The presentation was by Dr. Fareed Zakaria. He talked about the current global economic woes: China is concerned about slowing down, India is slowing down, the concern of over valuation of currency in Brazil, EU's concerns about the collapse of its economy and fear that the US can't pull out of its recession. However, Dr. Zakaria was optimistic, and he cited three basic reasons for this economic optimism:
1) Peace - When you compare the previous three decades with the current political climate around the globe, this is one of the most stable, global periods in modern times. No major country is at war with another, and while there are certainly pockets of combat around the globe, some of them horrific, the fact is that the amount of armed conflicts is down 50% from the 90s, 75% from the 80s and 90% from the previous three decades (and even more if you go back to World War II).
2) Economic Convergence — Dr. Fareed stated that in the 1960s, there were only 32 countries that had economic growth greater than three percent, today there are about 100 countries with economic growth greater than three percent, many of them (most) participating in the global economy. Dr. Zakaria discussed the current concerns in Greece and highlighted the fact that their default wasn't something new, stating: "Greece has defaulted 50% of the time over the last 175 years since it gained independence from the Ottoman Empire; this is not new. What is new is that for the first time Germany is offering to bail them out•" The point was that the Europeans are coming together economically and that he predicted a stronger cross-EU economy as a result of the current tribulations.
3) Technology - And now I come full circle back to the Internet. Dr. Zakaria again used a history example saying that demonstrations in Egypt were not new; organizers had been protesting for years. They expected to have about 4,000 demonstrators across Egypt, like they have had previously. However, fueled by the Internet, 1.5 million demonstrators participated in this past January's protests that lead to a complete change of the government, including President Mubarak's resignation.
The message was clear: Global stability is helping to facilitate a global economy, one in which the Internet is a primary means of communication for commerce. Zakaria said, "The combination of e-commerce innovation and a growing global market spell long term opportunity for online retail," while direct to consumer shipping currently accounts for approximately 30% of all parcel shipments (based on a January New York Times interview with David G. Ross, an analyst at Stifel-Nicolaus). Those shipments are growing faster than the B to B segment. While we tend to think of the US as the largest e-commerce market (it is according to a new report from the Interactive Media in Retail Group), those statistics are based on an analysis of comparing the US to other countries. If you were to compare US to Europe as a whole, Europe is slightly larger with 10 billion more in sales through 2011 (according to the European Multi-channel and Online Trade Association).
The technology to support this global e-commerce market needs to keep pace. Shipping software, services, and billing all need to be able to run on single platforms to provide finance and operations with visibility, not just of the goods in transit, but of the costs and metrics that foster efficient operations, and happy customers, no matter where they are.
The presentation was by Dr. Fareed Zakaria. He talked about the current global economic woes: China is concerned about slowing down, India is slowing down, the concern of over valuation of currency in Brazil, EU's concerns about the collapse of its economy and fear that the US can't pull out of its recession. However, Dr. Zakaria was optimistic, and he cited three basic reasons for this economic optimism:
1) Peace - When you compare the previous three decades with the current political climate around the globe, this is one of the most stable, global periods in modern times. No major country is at war with another, and while there are certainly pockets of combat around the globe, some of them horrific, the fact is that the amount of armed conflicts is down 50% from the 90s, 75% from the 80s and 90% from the previous three decades (and even more if you go back to World War II).
2) Economic Convergence — Dr. Fareed stated that in the 1960s, there were only 32 countries that had economic growth greater than three percent, today there are about 100 countries with economic growth greater than three percent, many of them (most) participating in the global economy. Dr. Zakaria discussed the current concerns in Greece and highlighted the fact that their default wasn't something new, stating: "Greece has defaulted 50% of the time over the last 175 years since it gained independence from the Ottoman Empire; this is not new. What is new is that for the first time Germany is offering to bail them out•" The point was that the Europeans are coming together economically and that he predicted a stronger cross-EU economy as a result of the current tribulations.
3) Technology - And now I come full circle back to the Internet. Dr. Zakaria again used a history example saying that demonstrations in Egypt were not new; organizers had been protesting for years. They expected to have about 4,000 demonstrators across Egypt, like they have had previously. However, fueled by the Internet, 1.5 million demonstrators participated in this past January's protests that lead to a complete change of the government, including President Mubarak's resignation.
The message was clear: Global stability is helping to facilitate a global economy, one in which the Internet is a primary means of communication for commerce. Zakaria said, "The combination of e-commerce innovation and a growing global market spell long term opportunity for online retail," while direct to consumer shipping currently accounts for approximately 30% of all parcel shipments (based on a January New York Times interview with David G. Ross, an analyst at Stifel-Nicolaus). Those shipments are growing faster than the B to B segment. While we tend to think of the US as the largest e-commerce market (it is according to a new report from the Interactive Media in Retail Group), those statistics are based on an analysis of comparing the US to other countries. If you were to compare US to Europe as a whole, Europe is slightly larger with 10 billion more in sales through 2011 (according to the European Multi-channel and Online Trade Association).
The technology to support this global e-commerce market needs to keep pace. Shipping software, services, and billing all need to be able to run on single platforms to provide finance and operations with visibility, not just of the goods in transit, but of the costs and metrics that foster efficient operations, and happy customers, no matter where they are.
