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
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
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
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.