E-tailers Have Opportunity Of A Lifetime

The more information I see, the more convinced I am that this holiday
season will be crucial to the future of many e-tailers.

While we may still be in the early stages of the e-tail revolution —
Forrester Research projects online retail sales will go from $7.8
billion this year to $108 billion in 2003 – millions of dollars in
future revenue can be earned by e-tailers who can successfully capture
the loyalty and business of the growing number of people who are buying

A study released Tuesday by research firm Greenfield Online shows that
about 75% of all people who use the Internet are now making purchases
online, compared to slightly more than half of ‘Net users just one year

And Internet buyers aren’t being stingy: 82% of them are filling their
online shopping baskets with more than one item, the survey reveals.

This willingness of people who buy online to make multiple purchases
bodes extremely well for the holiday season. The consumer who last year
dipped his toe in the e-tail waters by ordering a book through
Amazon.com could be doing most of his holiday shopping through the
Internet this year.

Indeed, another recent survey, this one by Harris Interactive, shows
that almost one-third of all Internet users plan to make at least one
online purchase this season, quadruple last year’s 8%.

Which is why e-tailers that are not prepared for the fall shopping rush
are in danger of permanently losing thousands of customers to online
competitors. The most obvious example is toysrus.com, the online spinoff
of bricks-and-mortar retail giant Toys ‘R’ Us (TOY).

A fallout with its venture partners and the departure of the parent
company’s CEO, both in August, have left toysrus.com in a state of flux
as the buying season heats up.

Meanwhile, eToys (ETYS), last year’s big holiday winner among online toy
sellers with $23 million in Q4 revenue, has since completed an IPO that
raised $166 million and continues to improve upon an already excellent,
consumer-friendly site. Some analysts project $100 million in sales for
eToys in the fourth quarter.

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