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The Rumors of Ecommerce Death
By: Rob Spiegel
As Nasdaq sputters along in dot com shame, a few million few dogged Internet consumers have ignored the crash. They continue to happily buy away. The good-news story is not popular with business writers, but Web retailing continues to grow seemingly unaware that the online mall is crashing down around them as they choose garden tools, sell sports cards and order vacation packages. Things aren`t perfect. There has been somewhat of a dip since Christmas, but I think most Net retailers can live with a post-holiday. Retailers have weathered after-Santa blues since the English switched from wassailing to kids toys in the mid-1800s.
We decided to take a look at recent reports on Internet retail sales just to see if the Net stock gloom was blunting the steady expansion of online commerce. We found some softening in the rate of growth, but we certainly didn`t find any contraction in consumer behavior. The shrinking effect right now seems limited to the number of dot coms rather then the number of consumers. In fact, if you subtract the bizarrely heightened expectations for the Internet, its growth is coming along just fine. By any standards other than the Net-boom mentality, Internet expansion continues to be fairly spectacular.
Net buyers hit ten quarters of continuous buying
Greenfield Online reported that for 10 consecutive quarters, 60 percent of U.S. Online consumers have made at least one purchase on the Web within a 90-day period. And 28 percent of these shoppers have clicked on Internet ads while shopping. Not surprisingly, those with an annual income of $50,000 and above are more likely to purchase goods (81 percent) than those whose income is below $50,000 (64 percent). Women on the Net buy at a slightly higher rate (74 percent) than men (71 percent). The top categories of goods continues to be books and CDs, followed by clothing, toys and computer software.
Rich buyers seek service basics online
Forrester Research looked at the shopping habits of rich consumers, those with investable assets on $1 million or more, and found that these shoppers are more interested in strong basic serve than they are in virtual exclusivity, extravagance and entertainment. Affluent shoppers have been buying linger, feel more comfortable buying, buy more frequently and, of course, spend more money,' said Ekaterina O. Walsh, a senior analyst at Forrester. 'They buy online for the same reasons for the same reasons that all online buyers do and care about price and positive experiences with Web stores.' Forrester recommends that sellers of luxury goods should concentrate on purchasing ease and a convenience return process.
Visitor traffic dips
PC Data Online found that traffic to leading ecommerce sites declined about 4 percent in February following an 18 percent seasonal drop in January. Goldman Sachs analysts cited port-holiday seasonality, a slowdown in the rate on new consumer adopting ecommerce and slower overall consumer spending as the factors in the slower month-by-month growth of Internet retai....[MORE]
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