U.S. companies will spend nearly twice as much on e-commerce software in 2019 as they did in 2014, and firms that sell to other businesses will account for a disproportionately large part of that increase, Forrester Research predicts.
Spending on e-commerce platform technology by larger U.S. companies will increase from $1.204 billion in 2014 to $2.090 billion by 2019, a compound annual growth rate of 12%. But manufacturers and wholesalers will increase their spending at a faster rate, as their share of e-commerce software spending will increase from 20% in 2013 to 30% in 2019, predicts the report “U.S. Commerce Platform Technology and Services Forecast,” by Forrester analysts Peter Sheldon and Michael Yamnitsky.
“Digital commerce is fast becoming a de facto component of B2B sales,” the authors write. “Whereas adoption of commerce technology in verticals such as retail and consumer products is already largely saturated,B2B industries such as manufacturing and wholesale are set to increase their adoption of commerce technology significantly over the next five years.”
B2B companies, the reports says, will shift from relying on salespeople and EDI to take orders “to Amazon-like web and mobile experiences that foster intuitive and quick self-service transactions directly for the buyer.”
Because many of them are behind business-to-consumer companies, B2B players will account for the majority of first-time e-commerce software buyers in the next five years. In particular, Forrester predicts fast adoption by the pharmaceutical and oil and gas industries.
Among B2B companies, wholesalers are among the leaders, with 46% of U.S. firms selling to retailers using commercial e-commerce software. “Nearly all will by the end of the decade,” the report says.
The Forrester report focuses only on larger U.S. companies, those with total revenue of at least $250 million or online sales of at least $50 million. E-commerce software sales to smaller companies worldwide totals $240 million annually, Forrester estimates.
Deploying an e-commerce platform is not cheap for the larger companies covered by this report. Forrester estimates the average project costs $1 million, and 15% of implementation projects cost over $2 million. And that’s just the cost of the software: spending on implementation and maintenance services typically runs five times that of the software itself. Total U.S. spending on those services also will nearly double between 2014 and 2019, growing from $4.200 billion to $9.772 billion.
The Forrester report only covers spending on two central components of e-commerce software: commerce management software “used to power online storefronts and manage pricing, promotions, shopping carts and purchase transactions”; and the order management systems that “orchestrate complex order processing scenarios from the point of capture through the point of fulfillment.”
Not included in this forecast is spending on related software that manages digital content, product information, site search, product recommendations and mobile commerce. Nor did Forrester include in its estimates fees retailers and other companies pay technology vendors for consulting and the upfront costs associated with determining the scope of an e-commerce deployment.
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