Originally published on January 4, 2000 and brought to you today as a time capsule.
E-commerce traveled a long way in 1999. From a novelty act in a distant corner of the economy, e-commerce moved to top billing with a stellar rise that we have not seen since the Beatles transformed the entire music business in the first few weeks of 1964.
Since all the Beatles did was send Elvis out to pasture, we can expect e-commerce to continue to alter the entire business world.
Earlier this year, the Wall Street Journal called the Internet “an economic pip-squeak.” Amazon.com was a book site. America Online had not yet become an e-tailer.
Toys “R” Us was talking about getting online. Wal-Mart was not sure what it was going to do. Schwab was the only online brokerage company of note. Europe was barely getting online. Microsoft actually looked like a monopoly.
Now, the whole business world cannot stop talking about e-commerce. Jeff Bezos was Time Magazine’s “Man of the Year.” Europe swarmed online.
The Internet is showing up on our cell phones and even in our toys (Sega Dreamcast). And immigrants who are just learning to speak English are “living for Ameritrade” — at least in U.S. television advertising.
Most venture capital flooded into dot-coms or brick companies with a solid Internet component. Every brick business on earth announced its Internet strategy.
Microsoft suddenly began to look like the high school kid who came back from a year-long foreign exchange trip hopelessly out of touch with the new fashions.
E-commerce is a household word now. You don’t have to explain it at parties. When the topic of e-commerce comes up, people now ask, “How come Amazon hasn’t shown a profit?”
So, for 2000, the bloom is off the e-commerce rose. Shoppers, analysts and investors are all going to expect substantial performance improvements from e-tailers. Pressure will be intense to improve customer service, including real-time interaction with customers and reliable product delivery.
A lot of those venture capital dollars will also end up being mainlined into high-profile dot-com advertising, although it is questionable how effective such advertising will be. Based on the holiday season, it looks like existing brands may be the big winners in online commerce in 2000.
Since new Web sites from well-known brick-and-mortar brands did extremely well during the holiday shopping season, everyone seems to touting the advantage an e-tailer has with an existing brick-and-mortar presence.
As a result, expect existing brick-and-mortar branded companies to move onto the Web en masse in 2000. This news is particularly good, incidentally, for the B2B infrastructure companies who develop software that these companies need in order to develop a rapid online presence.
It also may be better news for the pure-play e-tailers than we might otherwise think. Many will end up as acquisition and merger targets for branded companies that want a quick way into the online world.