NEW YORK (TheStreet) -- E-commerce continued on its impressive growth path over the 2014 holiday season. While overall U.S. retail spending in November and December increased 4% year-over-year, online spending went up 15% (even excluding purchases made via tablets and smartphones), a result in line with eMarketer's estimate of a 15.7% rise in 2014 U.S. online sales.
Even though bricks-and-mortar stores still handle about 80% of all consumer purchases, the recent decline in same-store sales has turned e-commerce into perhaps the primary engine for growth in the retail industry. As you ponder what the future might hold for online retailers and consumers, keep an eye out for these four trends.
1. Retention Through Subscription
The e-commerce space is both large and expanding, providing shoppers with a vast array of choices, not just in products to buy but in places to buy them. The ease and convenience of online shopping has severely reduced "neighborly" behavior -- i.e., the propensity of people to frequent nearby stores -- so building audience loyalty is now more difficult than ever. With special offers popping up in the click of a flash sale, retailers can't rely on the old standbys of significant, limited-time savings or even traditional sales dates (e.g., Black Friday); they have to find other ways to keep their best customers coming back again and again.
Amazon (AMZN) understood this long before most other retailers did, launching Amazon Prime, the current e-tailer gold standard for subscription programs, in 2005. Since late 2011, when the program added Kindle Fire and other benefits to its prepaid two-day shipping benefit, the Prime subscriber base has taken off. While the exact number of subscribers remains a closely guarded secret, a financial analyst recently estimated it at 30 to 40 million U.S. subscribers and about 50 million worldwide. The company just announced that Prime grew more than 50% last year.
Numbers like those -- and the fact that Amazon cares more about cash flow than prices or even profit at this point -- have left retailers scrambling to keep up. Big-box stores have responded by introducing loyalty programs of their own, offering subscribers discounts and free shipping on consumable goods and other purchases. They're also taking advantage of their existing bricks-and-mortar stores, shipping orders from there in an effort to compete on delivery times with Amazon's growing chain of warehouses across the country.