What Matters in E-Commerce

Part 2. Last week, I tried to explain why I think so many online businesses have been failing: I attributed the failures to a lack of consumer demand for Internet-based services when traditional retail and service outlets serve just fine. In other words, consumers have let us know what it is about the Internet that they can—and cant—live without.

Things we cant live without are those we couldnt have done before the Web came along. Grocery shopping is pretty much the same whether you do it or someone does it for you. The reason some retailers—lets just use Amazon.com as an example—have been relatively successful is that Amazon has been able to offer a much larger selection than the local bookstore, even greater than the new book and music superstores going up. For a while, Amazon could even offer lower prices.

Even at its most basic, Amazon served as a terrific source for information. So, all things considered, Amazon created something we couldnt live without, even if it has evolved into something different than just a big store.

Other things we cant live without, and some we can:

Cant: eBay. The auction site is still going strong while all around it crumbles. No one has been able to duplicate its success, either. As long as there are people who have stuff to sell and people to buy the stuff (and as long as the Web exists), eBay will survive.

Can: Free things. The shutting of sites like FreeRide.com and Cyberrebate.com is further proof that theres no such thing as a free lunch.

Cant: Fantasy sports. Where would baseball and football fantasy leagues be without the Web?

Can: Niches. Sorry, but as much talk as youve heard about the empowerment of the individual made possible by the Web, the truth is that this is a medium for the masses, just like print, radio and TV before it.