E-Commerce by the Numbers: Research Sources and Solutions
Traditional sources of quantitative industry data are not very useful when it comes to e-commerce and that can make finding answers to these types of questions difficult. Unlike other industries, e-commerce does not have its own SIC or NAICS code. Companies involved in the industry are classified under several categories, making it difficult to track overall industry activity. To bypass this problem, some researchers may try to aggregate data from individual companies involved in the industry. However, since many e-commerce companies are privately held, reliable data is difficult to find. Even among public companies, creative accounting techniques sometimes affect the validity of reported data.
However, the SIC/NAICS
coding problem does not mean that quantitative e-commerce data does not
exist. It just means that you need to dig a little deeper to find what
you seek and be a little more careful of what you find. This article will
try to show you where to start your search and to point out some caveats
to keep in mind along the way.
The E-Commerce Industry: An
The e-commerce industry — commonly referred to as the “Internet Economy” or the “New Economy” — consists of companies deriving at least some portion of their revenues from Internet-related products and services. According to the Center for Research in Electronic Commerce (CREC) at the University of Texas1, Internet Economy revenue exceeded $500 billion in 1999. By the end of 2000, CREC expects revenue to reach $850 billion. CREC contends that the Internet Economy directly supports about 2.75 million jobs, more than the number supported by the insurance or communications or public utilities industries, and more than twice the number supported by the airline or legal or real estate industries. Overall, CREC maintains that the Internet Economy grows at a rate 15 times that of the U.S. economy as a whole. As an information professional, e-commerce is clearly an industry you should know about.
The first thing you will notice when you begin e-commerce research is that the industry — like most others — has its own lingo. [See “The E-Commerce Jargon” sidebar on page 60 for a translation of some of the most commonly used acronyms and terms.] You will also notice that for-profit firms constitute the primary source for the vast majority of quantitative data in the field. However, since no standard classification system exists for the e-commerce industry, these firms produce wildly differing economic measurements and projections. Each firm uses a different conceptual framework and a different analytical methodology for its research. The end result is a situation in which estimates among firms might vary by 75 percent or more.
Be careful to cite
your sources when presenting data to your end users. Treat quantitative
e-commerce figures as only guidelines, not as “facts.”
Finding Quantitative E-Commerce
Market research firms in the e-commerce industry do not ascribe to the “information wants to be free” line of thinking. Typical reports cost anywhere from $1-3,000. So if you are on a limited budget, how do you find the information you need? There are four main approaches:
1. Look at market research firms’ press releases.
2. Search for mentions of a research study in the press — often an article will quote a study’s key findings. Look in article databases or on Internet Economy publication Web sites.
3. Visit Web sites with a quantitative e-commerce focus, such as statistics aggregators. These sites provide summaries of research firms’ findings for free (or at a very low cost). Some sites also add their own analysis as well.
4. Bypass market research firms and try to locate free or low-cost data from universities, nonprofit organizations, or government agencies.
#1: Press Releases
There are two main ways to access research firm press releases: by searching the press archives on company Web sites, or by searching the press release databases available through commercial vendors such as Dialog, Factiva, LEXIS-NEXIS, or Northern Light. Searching press archives on company Web sites may not cost money, but it can cost a lot of time and also prove frustrating and sometimes unsuccessful (especially when a company’s internal site search engine is not very robust or does not exist at all and leaves you browsing through titles chronologically). On the other hand, searching for press releases through a database vendor such as LEXIS-NEXIS, while very efficient, can also be expensive. Northern Light might offer a good compromise — the search itself is free, and most full-text press releases are available for a nominal charge.
If you decide to look at research firm Web sites, try the following URLs for significant findings from recent research:
Data Corporation (IDC)
#2: Research Mentioned in Articles
Try to find mentions of primary research in news articles. There are two main ways to do this: searching aggregated business news databases, or searching the Web-based archives of print and online publications in which research mentions will most likely appear. The first way may not work well, because most of the important Internet Economy publications are not covered in major business databases. For a more effective approach, go directly to the Web sites of Internet Economy publications. Although slow, this approach will probably find the information you need. The Web sites of Internet Economy publications contain archives of previously published articles, usually accessible through robust internal search engines. I recommend the following sites:
(for Internet researchers)
#3: Quantitative E-Commerce Research Aggregators
You can also visit the Web sites of quantitative information aggregators. These sites pull together research published by several different firms. Some sites also publish summaries of their own internal analysis efforts.
Click on eStatStore for individual statistics reports, but be careful, many of the free statistics available from the store are outdated.
from The Industry Standard
Excellent resource. Also, go to http://www.thestandard.com/research/metrics/display/0,2799,9801,00.html for an article by Maryann Jones Thompson entitled “Tracking the Internet Economy: 100 Numbers You Need to Know” (September 13, 1999).
Some useful statistics here.
Has some unique content not available through other sites.
Fact sheet about
Internet Economy from Cyveillance
Aggregates others’ primary research, but though it lists its sources, it does not specify source publication dates. Use with caution.
Not a QER aggregator per se, but it links to e-commerce articles, books, etc.
Similar to Ralph Wilson’s E-Commerce Research Room, but more difficult to navigate.
E-Commerce Special Edition
Lists some useful e-commerce links.
Offers a listing of e-commerce links and resources.
A market research reseller. If you want to order a primary market research report (and you have a lot of money to spend), go to this site first.
#4 — Universities, Nonprofits, and Government Agencies
The last approach we will cover involves tapping quantitative research available for free through university research centers, nonprofit associations, or government agencies.
One of the best sources of free quantitative e-commerce research is the Center for Research in Electronic Commerce at the University of Texas. Their most recent report, “Measuring the Internet Economy,” is an excellent resource for historical market data and trend projections in the e-commerce industry. To access the report, go to http://www.internetindicators.com/.
Try also the eLab at Vanderbilt University. There are several free research papers available for download here: http://www2000.ogsm.vanderbilt.edu/papers.html.
The Organization for Economic Cooperation and Development publishes its own Internet and Electronic Commerce indicators. See http://www.oecd.-org/dsti/sti/it/cm/.
The U.S. federal government publishes a few e-commerce reports. One recent report, the “Digital Economy 2000,” mentions several quantitative e-commerce studies conducted by market research firms. The report is available for download at http://www.ecommerce.gov/.
The federal government
also collects a limited amount of primary data. The Census Bureau publishes
estimates of U.S. retail e-commerce sales as part of their Monthly Retail
Trade Survey. Go to http://www.census.gov/mrts/www/current.html
for the most recent report.
The Future of Quantitative
As the e-commerce industry matures, the U.S. government will probably take a larger role in data-collection efforts. This will lead to greater standardization and a lessening reliance upon research conducted by for-profit firms. As a result, research report prices could drop and report quality improve. Until then, however, information professionals will need to locate quantitative e-commerce information indirectly, and maintain a healthy skepticism of the information once it’s found.
1. CREC, “Measuring
the Internet Economy,” June 2000, www.internetindicators.com.
JARGON: A PRIMER
ASP: Application Service Providers. Companies leasing access to software applications via the Internet (instead of selling or licensing software applications for installation on the user’s hard drive). ASPs generally follow a B2B business model, although in the future, consumer-oriented ASPs may prevail.
B2B: Business-to-Business. Any Internet business that sells its products or services to other businesses.
B2C: Business-to-Consumer. Any Internet business that sells its products or services to consumers for their own use.
B2G: Business-to-Government. Any Internet business that sells products or services to government agencies.
Back-End: The programs and applications that support the functionality of the front-end Web site.
Bricks-and-Mortar: Businesses with physical locations (often refers to traditional firms without active e-commerce strategies).
C2C: Consumer-to-Consumer. Any Internet business that provides a means for consumers to sell products or services to other consumers (such as e-Bay).
Clicks-and-Mortar: Businesses with both physical locations and Internet sites (usually refers to e-tailers or to the e-tailing strategy of a formerly traditional firm).
CRM: Customer Relationship Management. This refers to the whole customer experience with a company or a Web site, not just customer satisfaction after a sale.
E2E: Exchange-to-Exchange. Any Internet company that facilitates the interaction or integration of two or more B2B marketplaces.
E-Marketplace: An Internet marketplace in which businesses in the same industry (usually) come together to buy and sell products or services.
ERP: Enterprise Resource Planning. This refers to business-wide process planning and integration. The Internet is often employed to make ERP more efficient.
E-Tailers: Internet retailers who generally follow a B2C business model.
Front-End: What people see when they go to the Web site — the interface and the site’s functionality (what it does).
ISP: Internet Service Providers. Companies providing access to the Internet (such as AOL).
Mission-Critical: Something necessary for the functioning of business operations.
P2P: Peer-to-Peer. Any Internet company that enables individuals to exchange resources (such as computer files) amongst themselves without involving a centralized control system.
Pure-Play: A company that only conducts business online (an e-tailer without a physical store presence would be called a “pure-play”).
Scalable/Scalability: Usually refers to the ability of a software application to expand as a business grows or a Web site’s traffic volume increases.
The volume of hits a Web site receives (the number of times people visit
a Web site).
|The Big Picture
It sometimes helps to consider the structure of how the Internet Economy works before one tries to deal with quantitative e-commerce information. The CREC group at the University of Texas developed a conceptual framework particularly well-suited for this purpose. Their framework breaks down the Internet Economy into four layers: infrastructure, applications infrastructure, intermediary, and commerce (see Table 1).
Table 1: Internet Economy Conceptual Frame
Source: Based on "Measuring the Internet Economy," Center for Research in Electronic Commerce, University of Texas, June 6, 2000, www.internetindicators.com.