December 13, 1998
Filling Up a Cart at the Internet Mall
By DYLAN LOEB McCLAIN
hen Rhonda Tallant of Euless, Texas, decided recently to buy some fishing equipment for her
husband, Curtis, and a vacuum cleaner for their home, she headed toward her computer.
"I've never been one to go to the malls and spend six hours looking for two or three gifts when I can spend
an hour at home in my chair and get everything I need," she said.
She is far from alone. Analysts say that as many as 20 million
people have made at least one purchase online. On the
Thanksgiving weekend, daily visits to Web sites that sell toys, for
example, jumped 56 percent, to 832,000, from the average before
the holiday, according to Media Metrix, a company that measures
Internet traffic.
Forrester Research, a consulting firm, estimates that Americans
will buy almost $8 billion worth of merchandise on the Internet
this year, up from $3 billion last year, and that holiday sales will
account for $3.5 billion of the total.
While these figures represent less than 1 percent of all retail sales,
said Kate Delhagen, an analyst at Forrester, she expects Internet
sales to reach $108 billion, or 6 percent of total sales, by 2003.
That would be twice the 3 percent share now made through direct
mail and telemarketing.
"This is going mainstream," she said. "We are in a
momentum-building stage right now."
Consumers are already facing an ever-widening array of Web shopping choices -- and not just for books,
CDs and toys. There are also sites for buying cooking supplies (cooking.com), furs (furs.com) and pets and
pet supplies (acmepet.com). And traditional retailers, like Macy's and Nordstrom, and catalogue merchants
like L.L. Bean and Land's End, now have Web sites, too.
If all the on-line choices are bewildering, shopping guides, including Shopguide.com, Bottomdollar.com and
Mysimon.com, can track down things like an 8-foot Fraser fir Christmas tree ($100 from Garden.com).
And if you are looking to sell items as well as find possible bargains, there are on-line auctions
(Firstauction.com, Ebay.com).
Lou Richman, finance editor of Consumer Reports, has called the Internet "the world's largest mall." In that
mall, however, Forrester Research expects consumers to confine about half of their purchases to two areas:
travel services (about $3 billion) and computer equipment ($1.2 billion).
Among Internet shoppers who were asked what they were likely to buy online this season, 47 percent said
computer software, 44 percent mentioned CDs and 43 percent said books, according to Greenfield Online,
an Internet marketing research firm.
Book shopping made a convert of Tina Robichaux, a programmer who lives in Duluth, Ga. Recalling her
first attempt at shopping on line about five years ago, when modems were much slower, she said, "It was
such a pain in the neck."
But having looked everywhere in stores for a book she wanted, she gave Internet shopping a second chance
and found the book at Amazon.com.
Now Mrs. Robichaux often shops on the Internet, buying airline tickets as well as books, making
reservations at bed-and-breakfasts ("I love it because you can tell what a place looks like") and ordering
fabric from a small company in Alaska. This holiday season, she plans to buy at least half her presents
online. With new technology, she said, it is easier than ordering by phone.
With online competition growing, many retailers are attracting shoppers by offering incentive programs or
affiliating themselves with popular Web sites:
-- At Women.com, a site directed at women, about 30 companies, including, Amazon.com; Hallmark;
Sears, Roebuck, and Office Max, sell products in an online store.
-- Netcentives.com offers frequent-flier miles on various airlines for buying products from any of its three
dozen partners, including 1-800-Flowers, Broderbund Software, Barnesandnoble.com and J. Crew.
-- Consumers who visit Shop2give.com and buy from an affiliated retailer, like Brookstone, Omaha Steaks
or Outpost.com, have a portion of their spending donated to the charities of their choice.
To gauge online buying, Consumer Reports asked 30 consumers with varying degrees of Internet shopping
experience to each buy a CD, a polo shirt, a computer game and a gift basket on line.
"There were few bargains," Richman said, adding that prices were similar to those in stores.
So far, online shopping has not made a significant economic impact on traditional retailers, but analysts say
it eventually will. At some companies, Internet profits may be gained at the expense of other businesses.
"The primary point of cannibalism is catalogue sales," said Nicole Vanderbilt, an analyst at Jupiter
Communications. "People who are willing to shop by catalogue are also willing to shop on line."
But online shopping will probably never fully replace brick-and-mortar stores. "For me, you have to try on
clothes," Mrs. Robichaux said. "You don't know the quality of certain things until you see them."
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