E-tailers endure dot-com downslide

Despite dot-com doldrums, North American online retail sales grew 66 per cent in 2000 to almost $US45 billion, and are expected to reach $US65 billion by the end of 2001, according to the study, entitled The State of Online Retailing 4.0.

Travel-related sales led the pack in 2000, reaching $US13.8 billion, and will continue to grow by another 50 per cent by the end of this year. Growth in book and computer sales will lag over the same period, however, levelling off at 25 per cent and 15 per cent growth, respectively.

Although many dot-coms have suffered blows from the quick-tempered economy over the last year, online retailers have been able to narrow their losses and increase their ability to draw consumers, the study states. In effect, these "e-tailers" have become leaner and meaner, cutting operating losses as a percentage of revenue from an average 19 per cent in 1999 to 13 per cent in 2000.

Although the report said that online retailers have strengthened their performances overall, there are distinct differences between click-and-mortar and pure Web-based retailers. Whereas, 72 per cent of cataloguers were profitable at an operating level in 2000, just 43 per cent of store-based retailers could boast the same, and only 27 per cent of Web-based retailers kept on top of their profit game.

These companies' increase in profits were in large part due to their ability to keep a handle on their marketing budgets and how they nipped costs related to attracting customers. Those expenses dropped from an average of $US38 in 1999 to $US29 in 2000 for all online retailers. Web-based vendors went a step further, however, chopping their costs spent luring customers from $US82 to $US52 over the same period.

"(Online retailers) are not in infancy; we have moved to the toddler stage and have started to conquer the basics now," Elaine Rubin, chairwoman of Shop.org, said in a conference call Wednesday.

"We have become a lot smarter and a lot more experienced," Rubin said.

To keep strong results, store retailers will have to manage their retail channels, and Web players will need to focus on their niche markets or seek partnerships to make up for their online cost disadvantages and weaker brands, the study said.

Looking ahead, the study predicts that an expansion of the online retail market will open the door for general merchandise to see increased sales in categories such as home and office products, as well as apparel and toys.

The study was based on data from 550 retailers, 156 of which provided detailed information. Differing from past years' analyses, this year's study excluded financial brokerages.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Scarlet Pruitt

PC World
Show Comments

Cool Tech

Breitling Superocean Heritage Chronographe 44

Learn more >

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?