Experts believe that, by the year 2016, 192 million Americans will be shopping and choosing games from Game-blog-ranking.com to play online, spending as much as $327bn between them. With this in mind, it has never been more important for businesses to develop their online presence. But what if local infrastructure problems get in the way of doing that? With the United States currently 31st in the world for Internet speed, are businesses being held back from realizing their global potential? What could this mean for the economy at large?
20 years of e-commerce
This month saw the 20th anniversary of the first ever e-commerce transaction, the sale of a copy of Sting’s album Ten Summoner’s Tales. From that single purchase, e-commerce has expanded spectacularly. Slow at first, it soon gathered pace, and a new infrastructure of online payment and delivery systems it spawned enabled it to dominate in a way that would have been difficult to imagine last century. It is now worth over $260bn a year in the US alone, and growing still. In this climate, no business can afford to be without it.
Connecting with customers
Unlike traditional marketing methods, online marketing makes it possible to target very specific groups of customers, increasing the chance that they’ll find adverts relevant and useful, and decreasing the chance that they’ll be annoyed by them. It makes it easy to get direct feedback from customers, including testimonials that can be used in further marketing, and it means it is possible to create a sense of relationship between the business and the customer like that between a villager and the owner of the local store, but on a grand scale.
Once these connections have been formed, social media, email and text messaging campaigns can enable them to be maintained over the long term, making the business feel like a constant presence in people’s lives but always giving them the option to opt out, so they don’t feel they’re being spammed. The flip side of this, however, is that if a business is out of touch for while, customers can rapidly lose patience.
A boon for small businesses
The other big difference made by the Internet has been a leveling of the playing field for big and small businesses. Thanks to the availability of high-quality, professional yet affordable online marketing campaigns for healthcare, plumbing, fashion retail and everything in between, even the smallest players can make a big impression. Customers win because businesses now really have to compete on quality. This has the effect of energizing the marketplace and revitalizing the larger economy.
Developing worldwide reach
As well as competing in their local areas and within America, small businesses can now reach out to trade worldwide, massively increasing their growth potential. To be successful in the global marketplace, however, they need to be able to compete against businesses based in countries with better infrastructure – and for some that could be a big problem.
Is the American Internet fit for business?
How can slow Internet affect a business? Research has shown that 57% of users will leave a site if it hasn’t fully loaded after three seconds. Even a one second delay could cause an 11% drop in page views and a 16% drop in consumer satisfaction. Yet while businesses in Hong Kong enjoy download speeds of 72.49 Mbps and those in Singapore 58.84 Mbps, America lags behind at an average of 20.77 Mbps. Admittedly, it’s quite varied – there are some places where it’s much better (such as Massachusetts and California) and others (like Maine and Kentucky) where it’s hard to use the internet at all – and this is due to the way that areas have been carved up by the big telecoms companies as a substitute for real competition. The fact is that most consumers have no choice unless they are prepared to relocate.
Americans not only have slower Internet than many other countries – they also pay more for it. Price structures tend to be designed to discourage high-speed use for reasons that make business sense for providers but not much sense for the economy as a whole. In other countries, like the Philippines, people have successfully lobbied government to intervene and prevent problems like this. Could the same happen in America?
The backbone of the modern economy
We have now reached a point where the Internet is essential to almost every aspect of business. Even sectors like organic farming, where little has changed for decades, rely on it for communication between suppliers and buyers. It has internationalized business like nothing before or since, and if America is to remain a major contender on the world stage, it cannot afford to fall behind.