Cumulus Rising

By eweek  |  Posted 2001-06-04

Last time I checked, the sky was still holding up its end of the bargain — just look up and youll see fluffy white clouds decorating a blanket of blue. But to read the headlines and listen to the talking heads expounding on the dot-com debacle and the tech stock meltdown, youd think the sky had fallen.

Truth is, the Internet isnt going anywhere. Internet technologies will become a bigger part of the way we do business and go about our daily lives — communicating, being entertained, buying stuff — than ever before.

In fact, the Internet didnt fail. Some of the people trying to exploit it did. Inept entrepreneurs, funded by overzealous financiers who were fueled by greedy investors, launched businesses that had no business launching.

Although some continue to forecast gloomy times for business-to-consumer companies, others are spotting the cumulus clouds in the sky. Jupiter Media Metrix expects U.S. online retail sales to reach $104 billion in 2005 and $130 billion by 2006, up from $34 billion in 2001. This compares with Jupiters original forecast of $36 billion in 2001 and $118 billion in 2005.

Meanwhile,, an online retail association, congratulated catalogers, which have proven themselves the only consistently profitable online retailers. Seems catalogers have a few inherent advantages over their online retail cousins, such as an efficient infrastructure in place to process consumer orders and handle customer service.

By sourcing private-label merchandise from contract manufacturers, catalogers also "hold the cost of goods sold to an average of 48 percent of revenue, compared to 60 percent for store-based and 73 percent for Web-based retailers," notes in a May study.

Will catalogers be the only ones to weather it out online? Sorry, cant predict the weather. But I do see storms for what they are — normal occurrences in a changeable environment.

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