We keep seeing figures on Internet growth, and they are really impressive. Internet and smartphone penetration in developed countries is almost total. If we look at it globally, we have reached 75% penetration, so we don't have much room for growth in this regard (my impression is that this 25% will take some time).
But what happens if we compare this korean girl whatsapp number data with e-commerce spending ? We realize that digital activity is very high, but that most of the money is still in the offline world.
Global Internet penetration smartphones vs ecommerce 1995-2015
Global Internet penetration smartphones vs ecommerce 1995-2015
In the video below you can see data that provides context on the importance of e-commerce within retail, and how this compares to total consumer spending (all data from the US). This is how you realise its real importance. It is comparing very macro figures, but this makes us see how much ground there is still to cover.
It is true that part of that pie will always be offline, but we have to start seeing the role of the Internet, not only in purely online models, but in its capacity to transform industries and improve them.
Another figure we often use to see growth is advertising investment . It is true that the Internet is the most important channel (38%, again in the US), but we are talking about a figure that is not growing.
But this analysis is a bit misleading, as it does not take into account marketing investment. That is, everything that is not advertising, but does have the objective of impacting your audience.
For example, investing in large stores to position your product on the shelves. Why do we consider it advertising investment when we do it on Google, and marketing when it is a shelf in a supermarket?
Look at how that 38% changes to 18%, and what the most important channels are. We could incorporate other costs, such as logistics, into this analysis, and we would see how their importance continues to decline. In a global view, the investment in direct marketing is much greater than that made on the Internet.
Advertising investment vs. marketing investment in the USA
Advertising investment vs. marketing investment in the USA
Digital business models have so far been the ones that best adapt to the environment, but the challenge lies in our ability to truly integrate with the offline and solve the new problems we face.
Look at what was happening 20 years ago, and now what we are facing in the next 20.
The reality is that we are not going to move from a 100% offline world to a 100% online one. Both worlds have merged and we will see how the percentages of importance of the Internet by sector will vary based on… common sense.
We have moved beyond the e-commerce and online advertising stage, now we have to do everything else. Innovations such as blockchain or cognitive artificial intelligence are going to change many, many things. This has only just begun!