E-Commerce: Feet on the Ground at Last

By eweek  |  Posted 2001-12-17 Print this article Print

As a barometer of the state of e-commerce, Amazon.com has always been pretty accurate. Its meteoric rise in the mid- to late '90s reflected the early hysteria of dot-com opportunism.

As a barometer of the state of e-commerce, Amazon.com has always been pretty accurate. Its meteoric rise in the mid- to late 90s reflected the early hysteria of dot-com opportunism. As demands for profitability increased, Amazon had a target on its back; as the "Bin Laden economy" tumbled, so did Amazon. And Amazon has risen of late as well, with its share price approaching the teens and with analysts predicting profits.

Similarly, there are some signs that online business in general has left hysteria behind.

E-commerce has become entrenched as an alternative retail distribution channel. It is growing: Gartner reports $11.86 billion in business this year in North America and $25.29 billion worldwide, up 30 percent from last year. Nielsen Net Ratings said $9.9 billion will be spent after Nov. 5. Jupiter Media Metrix reports that $11.9 billion will have been spent online in the United States in November and December, up 11 percent from last year. Yes, e-commerce seems to have found solid footing at last. There are plenty of benefits inherent in e-business already, but more need to be delivered. For example:

Security and privacy: Other than the required privacy policies, little has been done to allay fears that financial data and personal information are being protected. Complexity and indifference earlier undercut the SET, or Secure Electronic Transaction, initiative as well as methods of public-key authentication. The popularity of debit cards has taken the wind out of the sails of smart cards. However, there is some good news: The government earlier this month formally approved the AES (Advanced Encryption Standard) up to 256 bits. Commercial use of AES-standard technologies should provide a strong boost.

Wireless: Handheld device makers, carriers and analysts predict that the next generation of wireless networks and devices is just around the corner. The Yankee Group says that about 436 million handsets will be sold next year, an increase of about 10 percent from this year. In terms of e-commerce, however, such numbers are meaningless unless consumers prove to the industry that theyre willing to buy goods using wireless handhelds. So far, that hasnt happened. But, again, theres hope. The advent of 2.5G networks next year, foreshadowing the arrival of 3G and alternative technologies, will give consumers a chance to prove themselves.

When comfortably secure, easy-to-use wireless sales transactions are available, e-commerce will make its next big push, becoming as indispensable as the cell phone. Until then, e-commerce will continue to work its way into our lives at a steady, if unspectacular, rate.


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