What’s The Truth About E-Holiday ’99?

Depending on whom you talk with, at what hour of the day, you’ll get a different picture about the ’99 holiday sales season and the future of e-commerce in general.

Within two days of one another, Forrester Research described November as the “drizzle before the coming storm,” while Nielsen NetRatings crowed about average audience gains of 79 percent from the Wednesday before Thanksgiving through the Sunday after.

Forrester predicted site overloads in November and gave examples of system shutdowns at Amazon.com (11/4 and 11/19), Toyrus.com (11/7) and credit card authorizer CyberSource (11/15).

However, when the dust settled on the Thanksgiving weekend, a PC Data study showed that 98 percent of Internet buyers felt that sites met or exceeded their expectations.


An Economic Pip-Squeak?

Forrester claims that e-holiday ’98 produced $4 billion (US$) in e-tail spending. That surprising consumer explosion launched 1999 as the year of e-commerce. Those were heady days, but remember, that $4 billion came in the middle of an overall consumer season of $180 billion. No wonder the Wall Street Journal called the Internet an “economic pip-squeak” in 1998.

What can we expect from e-holiday ’99? The range of predictions from such reliable sources as Forrester, Ernst and Young, and Deloitte and Touche runs from $4 billion to $15 billion. The most common prediction is $8 billion, a 100 percent increase over last year. Ten percent of Americans say they’ll shop online, up from five percent last year.

So what is all the fuss about? It seems that we are going from a little bit of shopping online to a little bit more shopping online.

Fickle Net Statistics

Mark Twain compared statistics to “ladies of the night,” saying that they will do anything you want once you pay for them. So, is the customer service cup half empty or half full? Using only statistics released by reputable research firms in the past month, I can make a case that Net customer satisfaction is at its lowest level and is continuing to sink at an alarming rate. I can also find support to prove that online customer service problems have been left thoroughly in the dust.

Follow The Money

So what is a Net company to do with the constant flow of conflicting data? Is it time to wring your hands or break out the champagne?

Well, follow the smart money and ignore the hype. Yes, the Internet is growing. It may seem like a gushing flood of expansion compared with the speed of the overall economy, but there is also a flood of new companies rushing in after the growing pie.

The best bet is to watch the companies that have spent the most time and energy honing their Internet business. AOL, Amazon.com and Yahoo! are investing heavily in e-tail. GE and GM are sinking capital into B2B e-commerce. Disney and NBC are preparing for broadband video streaming. Microsoft and IBM are feathering their nests in wireless connectivity. Everyone has an eye on China. They’re likely all correct in their judgments.

Internet growth will be incremental. It won’t save the free world or cure the ups and downs of economic cycles, but it will give smart local companies a shot at international markets and will make business more efficient and productive. If you keep a level head and an eye on the innovators, you’ll come out okay.

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