Weekly Web Watch: Online shopping soared in ’99, but fell short of expectations

The 1998 holiday season was the first real e-Christmas. This time a year ago, a lot of people were thinking, ’This Internet thing really is going to be a meaningful shopping channel.’ That realization prompted countless business plans and online retail ventures. And this time around, it was really quite big.

The 1998 holiday season was the first real e-Christmas. This time a year ago, a lot of people were thinking, ’This Internet thing really is going to be a meaningful shopping channel.’ That realization prompted countless business plans and online retail ventures. And this time around, it was really quite big.

The 1998 holiday season was the first real e-Christmas. This time a

year ago, a lot of people were thinking, ’This Internet thing really is

going to be a meaningful shopping channel.’ That realization prompted

countless business plans and online retail ventures. And this time

around, it was really quite big.



Initial estimates put overall holiday shopping for 1999 at around

dollars 185 billion, up approximately 8% from 1998. Online shopping

accounted for about dollars 9 billion of the total. Additionally, many

online retailers saw orders grow to five or even 10 times 1998

levels.



So the question is, why are so many of them now having a tough time on

Wall Street? Quite simply, however good the holiday season was, it was

not quite good enough for many retailers. For every online retailer to

meet the expectations of its investors, overall sales had to be much

higher than they were. Internet stores needed to capture more than they

did from the brick and mortar stores.



And many of the reasons why they didn’t are PR-related.



Look back at some of the press coverage in November and December. Sure,

it was hard to find a holiday shopping guide in newspapers or consumer

magazines that did not at least include a section on the Internet, with

suggestions of where to find things and how to avoid getting ripped

off.



But that was in the Metro pages or in dedicated shopping guides - in the

back of the book, in other words. Up front, in the news pages, reporting

before Christmas was dominated by predictions that stores would have

trouble meeting orders and delivering on time. Some sites, most notably

ToysRUs.com, suffered widely publicized failures after crashing under

the sheer weight of users.



It’s not like Toys R Us hadn’t had prior experience of that very

problem.



Also it had certainly invested to try to redeem its already tarnished

online reputation and fight back against the inroads made by its arch

online rival eToys.com. But if the result proves one thing, it’s that

building a good web site - one that works under pressure as well as

being easy to use - is not as easy as it looks.



As for eToys, it had its own PR problems in the form of a very

mismanaged lawsuit against an ’art collective’ called etoy.com. With two

Web addresses so similar, it’s quite understandable that many people

expecting Barbie or Pokemon will have ended up with something rather

less suitable for family viewing. Unfortunately, eToys thought this gave

it the right to try to take down a site that had existed for several

years before eToys had even been envisioned.



The company’s legal action prompted a storm of protest, most notably in

the form of a concerted online campaign to drive down eToys’ stock

price, coordinated by corporate watchdogs RTMark (www.rtmark.com).



Normally, this sort of thing would not get much press in the

conventional media, except that this time the names of the protagonists

made it an irresistible story that received coverage in most major

newspapers. The effect was to add to a general impression of the

Internet as an ungoverned frontier, a Wild West best left to brave

pioneers to settle before the rest of us venture forth. Not exactly an

environment conducive to neophyte online shoppers.



Many potential online buyers were undoubtedly put off by this and by the

widespread press reports of poor service and late delivery. With

expectant children sitting around the Christmas tree, it’s not good

enough to say ’Toys R Us didn’t deliver.’



- Stovin Hayter is editor-in-chief of Revolution magazine.



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