By all accounts, the holiday shopping season is off to a good start. Retailers are reporting strong sales since the traditional Thanksgiving Day kickoff, particularly for online sales. On Friday, online sales were up 26% over the day after Thanksgiving last year.
There is no greater internet security concern than ensuring safe online transactions. I have some advice that I will share at another time, but to be blunt the most important security measure is awareness and trust. Be aware of who you are transacting with be sure they can be trusted.
For today, I want to put into perspective where we are in terms of the development of e-Commerce. It has been 18 years since the commercialization of the internet and the web. Conventional 'brick and mortar' retailers have not disappeared, but the competition from online has favored the larger retailers. Small boutiques have had a hard time competing unless they can offer something very unique.
The day after Thanksgiving has long been recognized as a critical day for retailers. Some people assume that the day has been dubbed 'Black Friday' as a negative characterization, but it comes from the huge volume of holiday sales on that day can actually put a retailer into 'the black' for the year, that is make a profit.
Online retailing is becoming an increasingly important part of the economy, so much so that the largest 'cyber shopping' day of the year has been given its own moniker, 'Cyber Monday'. It seems that once the shopping frenzy has commenced, consumers don't want a little thing like being at work stop them. They evidently continue the madness from the confines of their workplace using their office computer and, increasingly their mobile devices.
It may be hard to believe today, especially if you under 30, but there was considerable doubt about the viability of online retailing when the web first kicked off in earnest in 1994. That was the year that the government lifted rules that barred the commercial use of the internet. It kicked off an era that is known at the dot com boom, where are remarkable amount of new business's started up to take advantage of the web as a new business platform. Suddenly, everything you could imagine was being offered online, from toys to shoes, from cars to homes.
The dot com boom was followed by the dot com bust, where most of these new ventures disappeared. In hindsight, this should not have been surprising. Historically, 90% if business startups fail within 5 years. The fact that so many dot com companies started at the same time meant that quite predictably most of them would go out of business at the same time.
Six years into a brave new online world, there were still a lot of open questions being asked about online retailing:
Will enough consumers be willing to provide their credit card information online?Will the cost savings of running an online operation outweigh the costs of shipping?Will the convenience of shopping online outweigh the delayed gratification due to shipping?Will consumers want to buy products based on pictures without being able to examine the actual merchandise?
Turmoil when the dot com bubble burst and these lingering questions led some to believe that online retailing was just a fad and could go the way of the Hoola Hoop and Cabbage Patch Kids.
Clearly, not so.
Online sales continued to grow steadily but more from traditional retailers augmenting 'brick and mortar' sales with online rather than a pure online business model.
publishes a list of the top 500 online retailers and , formed specifically as an online retailer reigns supreme at the top of the list. But a look down the list finds that only 5 or 6 of the top 50 are companies known primarily for their online sales.
For example, Apple, Staples, Wal-Mart and Dell round out the top 5. Of that group, only Dell has been known primarily for non-traditional retail distribution. Dell first gained fame for taking orders for computers using a '1-800 number' in the years before the web took off.