After all of the attention paid to eCommerce over the past decade, it only accounts for seven percent of U.S. retail spending (see our recent breakdown). Beyond retail, if you look at just services, close to 100 percent of the transactions — and the actual work — happen offline. Think salons, restaurants and roofers.
This is the opportunity that SMB management platform Booker calls “service commerce.” And in dollars, it’s 5x greater than eCommerce. This considers a U.S. local services market of $2.5 trillion, compared to $500 billion in eCommerce, Booker CEO Josh McCarter told us at BIA/Kelsey SMB (video below).
“Think about the last month and the amount of services you ordered online,” said McCarter. “Whether it was food delivery, or an uber, or you made a restaurant reservation, or maybe you even had alcohol delivered to your house from Drizzly. All of those things are happening right now.”
Where online booking is concerned, there’s an addressable market of 10 million local businesses in the U.S., says McCarter. However only 500,000 (5 percent) are currently using software to book appointments. That’s equal parts opportunity and challenge: antiquated systems require lots of onboarding.
But booking and scheduling can also be seen as a beachhead for adjacent services like CRM and payment processing. Just as we see companies in local broaden that suite to lock themselves in deeper with SMBs (read: reduce churn), McCarter is all about integrating with a full slate of SMB operational utilities.
Importantly, that notion aligns with BIA/Kelsey’s new Local Commerce Universe (LCU). As Abid Chaudhry and I introduced at the same conference, the LCU represents the expansion of the local opportunity beyond just advertising and marketing. It’s about a broader suite of operational tools to run a local business.
“There are a lot of pieces that tie in from the advertising side, which is about driving people offline to receive a service,” said McCarter. “And in another way, it’s looking at the businesses and providing them the tools they need to really make themselves bookable and searchable online.”
See Josh’s presentation and our full interview in the video below.