Online Shopping: A Trend, Not a Spree

As this years holiday shopping season kicks into high gear, consumers continue to make more and more of their purchases online—about twice as many as they were making two years ago, according to a study by the U.S. Department of Commerces Census Bureau. The study also showed that retail e-commerce sales in the third quarter were $11.1 billion, up 34.3 percent from the third quarter last year. That excludes, thanks to Census Bureau methodology, sales by online travel services, financial brokerages and online ticket agencies, significant market segments.

These numbers tell us those who thought that the dot-com bust included a consumer retreat from online purchases were wrong. But progress is admittedly gradual because online buying is all about behavior, and behavior takes time to change. Some forces are working in favor of online buying. For example, as the price of a powerful PC continues to hover in the hundreds of dollars, a richer consumer experience can only become more widespread as it becomes more affordable. Broadband Internet access becomes more ubiquitous with each passing month, and that will contribute to the consumer experience as well. The proliferation of wireless devices and their use as purchasing tools will also drive online sales, although this is a gradual process. On the downside, consumer purchasing will be discouraged by the recent theft of some 30,000 electronic identities, thanks to a help desk worker at Teledata Communications.

But we also note that Amazon.com can be profitable in quarters when it wants to be and is partnering with different brick-and-mortar entities on promotions. We think thats as it should be. Those who arrogantly believed that the only demographic market served by brick-and-mortar establishments was the Neanderthal one were under a delusion—and that included at one time Amazon.com itself.

Were just at the beginning of the era of online shopping. IT must step to the fore to better secure transactions and protect identities and then work to enrich the user experience and make it available on a wider variety of devices. Then behavior can do the rest.