(NOTE: The following is the first half of a piece I wrote for the most recent ATG Insight Online Newsletter. The rest will follow in the next day or two. If you like what you read, please take a look at the full newsletter and sign up to receive it each month.)

Have we entered the “dot calm” era? Some industry pundits have been buzzing about it in recent months, citing statistics that the rate of online commerce growth is slowing.

Sure, the rate of growth is slowing but is that really so surprising? Online shopping is now mainstream, which means people are comfortable doing it – so comfortable, in fact, that some are predicting online sales will double in the next five years to some $350 billion.

But comfort can lead shoppers to boredom…an online world-weariness even. Which means that we – as e-sellers – can’t get too comfortable. Since the dawn of the e-commerce era, we have figured out the basics – built the infrastructure and enticed consumers to come, shop and even share a little. But, while we have made great strides, our creativity is far from tapped. We’ve taken a careful approach to the Web and have related it to established channels. We have augmented the print catalog with the Web catalog. We have shifted marketing mailboxes from the driveway to the Web. And we have built a shopping process that assumes that you push a cart through the store and checkout by the exit. The channel has been established and has even become ingrained. It has eased customer adoption, enabled us to learn the operations and helped us gain credibility. But have we fully optimized the shopping experience? Could we create more than convenience? Is it possible that the rate of e-commerce growth could actually rise if we could better replicate, or even improve upon, the experience of the lively brick-and-mortar store?

We need to acknowledge emerging dynamics – and think about their consequences
It’s time for us to bring e-commerce to a new level. That’s not to say we should altogether abandon what’s worked in the past or what we are doing now, but it does require us to alter our approach and open our eyes to the changing realities of e-commerce and the customers we serve. The truth is that business metrics show serious room for improvement. Consider these facts:

• 25% of online shoppers abandon their shopping cart (Forrester)
• 47% of e-commerce sites do not know their abandonment rate (Internet Retailer Magazine)
• 40% of online shoppers are dissatisfied with their online purchase experience (Forrester)

Meanwhile, conversion rates, visitor traffic, online revenue growth and online profitability vary greatly from e-seller to e-seller – which indicates that we are sorely lacking in the repeatable models and best practices needed for ongoing success across the e-commerce arena. And is if that’s not enough, we also face a major change in the customers we serve. We need to ready ourselves to meet the Millenials (you know, those people born after 1982). They represent about $200 billion in spending power annually – and by some estimates, they will spend as much as 17 percent of that online. But they are very different from their predecessor — GenXers and Baby Boomers — in some important ways. They are a perpetually connected, multi-tasking, fickle crowd who know what they want and aren’t afraid to “click around” until they get it.  They aren’t brand loyalists; rather, they demand a personalized, satisfying and entertaining experience – no matter what they are shopping for. They aren’t impressed that you can offer “multi-channel” commerce. For Millenials, the ability to do business with you across channels is merely table stakes. For them, channels are access points, not operations. What really matters is whether or not you know them when they cross channels. In just a few years they will be your average customer – and they will likely drive other generations’ behavior, which may soon share their expectations.

The truth is that we are largely unprepared to deal with the heightening demands of the customers we serve. Some merchants are trying to keep up, but outmoded approaches are making it challenging and unsustainable. For example, about 50 percent of merchants are trying to at least appear dynamic by changing Web store elements weekly or more (for the most part, they are adjusting homepages). An astounding 83% of merchants are making these changes manually (no wonder they aren’t diving deeper than the homepage!). Merchants want to do better. They want to do things like personalize the shopping experience – and some are doing it in limited ways on the Web and in e-mail. But to make that happen, merchants need more efficiency and a better approach.

(Next up in tomorrow’s post: what to do about all this!)

[tags] e-commerce, ecommerce, Millenials, online shopping [/tags]