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Online and offline commerce on cusp of a convergence

Sharon Gaudin | Oct. 19, 2011
As consumers use PCs, smartphones and tablets, to research, compare prices and buy products, the line between brick-and-mortar and online stores is getting harder to delineate.

"They are providing ways for better impulse buying, ways to connect multimedia ads to fixed ads and displays, and location-based promotions that can bring people into stores to buy who otherwise might have walked away," said Rob Enderle, an analyst with the Enderle Group. "They are changing the face of buying, and the retailers that aren't adopting quickly enough are being left rapidly behind."

And while location-based services, like the immensely popular Groupon , are helping bring people into offline stores, online shopping still is taking a toll on traditional shopping, according to Mary Meeker, a partner at the Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers.

A speaker at the Web 2.0 events and a well-known venture capitalist and former Wall Street securities analyst, Meeker noted in a presentation this week that e-commerce has shown four quarters of accelerating growth. E-commerce is doing so well that it's taking growth away from traditional media.

Meeker added that the top reason consumers abandon in-store purchases is because they find the product at a better price online. "Transparency and mobile are making a huge difference in commerce," she said.

Mark Benioff, CEO of enterprise cloud computing company, said Facebook and social networks are making a distinctive change in commerce.

Benioff noted that Coca-Cola has had more than 30 million people "like" its Facebook page, but when one of them walks up to a Coke vending machine, the machine doesn't recognize them or their social profile, and it should.

"They could have an app that gives you loyalty points for following the company and buying their soda," he said. "We need to make more linkage between what's going on in our companies and in the social world."

Enderle said changes to the world of commerce are coming swift and sure. And the way consumers make purchases will continue to shift in the coming years.

"More of [our purchases] will be online and automatic," he said. "We'll have trusted relationships with a large number of vendors or agents that likely don't even exist today who will be expert at meeting our unique needs."


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