Musea, It is interesting that you comment about retailers banding together to form a mall to battle the large chains, because about a month ago I published a terse comment to the effect that the portal companies like AOL represent the information age equivalent of the shopping mall. I want to own the mall rather than the store that rents space in the mall, because I don't know who the eventual e-retail winners will be. But I figure that the surest way to make money is to invest in companies that provide the infrastructure required e-commerce. This includes companies like the network hardware vendors (ASND, CSCO etc.), network security companies (like NETA), and portals (like AOL and YHOO)
I expect that the greatest retail advantage will accrue to specialty retailers who will not need to discount to sell their wares. For example, I love beans and peppers (this is absolutely true!). I cannot get the more esoteric varieties locally. So I have two choices: either I shamelessly solicit friends that I make on the web for local favorites, or I buy from web-based specialty stores. The interesting thing is that it is frequently much more expensive to buy these specialty items on the web then to buy them locally in traditional retail outlets! So, depending on the quality of their web sites, and the quality of the portals they use, these companies stand to make quite a bit of money e-tailing -- probably because there is such limited competition for their market niche.
Financial services have already seen a major restructuring as a result of e-commerce. Virtually all of the brokerage houses have an internet-based discount arm. Even ML will have one soon. This has probably thrown a number of brokers out of work. Banking and insurance are other examples of companies that have felt the impact of e-commerce.
Please keep your thoughts coming. I find this a highly stimulating discussion, and value your comments -- all of which I find intelligent and well thought-out. I think this discussion goes to the heart of internet investing!
TTFN,
CTC |
