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ECommerceTimes.com

E-Commerce For Everyone

By Paul A. Greenberg
Dec 17, 1999 12:00 AM PT

This week's new alliances between AOL and Wal-Mart, as well as Yahoo! and Kmart, are designed to tap into what Goldman Sachs calls "the fastest-growing demographic coming onto the Web," or the 96 million Americans who make less than $50,000 (US$) a year and have yet to become Internet users.

E-Commerce For Everyone

By all accounts, this week has the potential to be a true watershed. When historians look back, for better or for worse, they might well be able to pinpoint the moment that e-commerce slipped quietly into the mainstream.

Blue-Collar Appeal

Until now, the online consumer population was generally a higher-income group with higher levels of education. While that market segment was an attractive one, it was fairly limited when compared with the U.S. population at large.

Therefore, the unstated aim of e-commerce became to reach across all socio-economic strata of society. The emergence of Kmart and Wal-Mart in the e-commerce movement is symbolic of middle America's inevitable transition to online consumerism.

If e-commerce began life as a revolution, the mass migration of the middle class to online buying would be the one development that could ensure its longevity. It may also be a strong signal that traditional business models and new media commerce are not mutually exclusive entities.

Familiarity Breeds Increased Revenues

The new alliances are reportedly the first of an onslaught of such pairings. Apparently, the industry has come to the realization that consumers are more comfortable with big, established companies with which they have been doing business already.

To further increase comfort levels among online consumers, online shopping malls have taken on the feel of brick-and mortar-malls. The stores within the online malls are as varied as those in traditional malls, but the concept and presentation mirrors what consumers are accustomed to.

Many analysts see the online mall concept as a non-threatening way for inexperienced Internet shoppers to make their first foray into online buying. Now, with the new alliances announced this week, that part of the online population is likely to grow exponentially and rapidly.

Integrated Shopping Draws Newcomers

Consulting firm Bain and Company, working in conjunction with Mainspring Communications, has found that the most successful Internet e-tailers will likely be those that have an offline counterpart.

The new study reports that consumers want the option of examining merchandise in a brick-and-mortar store prior to ordering the items online.

Further, consumers want to be able to return items quickly and easily to the offline store. The upshot is that retailers that offer both online and offline sales are much more likely to attract shoppers than those that are exclusively online.

Accordingly, e-tailers without offline counterparts are likely to remain niche players, the study concludes.

Close Look

Meanwhile, industry analysts will track the new alliances with a keen eye. Wal-Mart, with 2500 stores nationwide, attracts 90 to 120 million customers a week.

Even if a small percentage of those consumers shift their buying habits online, the future of e-commerce could be significantly altered. For its part, Wal-Mart could gain mightily by its new partnership with AOL, particularly since its first e-commerce venture was unsuccessful and its newly revamped site missed its target goal of a pre-Christmas launch.

The new site is set for a January, 2000 debut.


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