Online Sales Lose Steam as Buyers Grow Web-Weary

[onehandle]

Source: New York Times

Since the inception of the Web, online commerce has enjoyed hypergrowth, with annual sales increasing more than 25 percent over all, and far more rapidly in many categories. But in the last year, growth has slowed sharply in major sectors like books, tickets and office supplies.

Growth in online sales has also dropped dramatically in diverse categories like health and beauty products, computer peripherals and pet supplies. Analysts say it is a turning point and growth will continue to slow through the decade.

The reaction to the trend is apparent at Dell, which many had regarded as having mastered the science of selling computers online, but is now putting its PCs in Wal-Mart stores. Expedia has almost tripled the number of travel ticketing kiosks it puts in hotel lobbies and other places that attract tourists.

The slowdown is a result of several forces. Sales on the Internet are expected to reach $116 billion this year, or 5 percent of all retail sales, making it harder to maintain the same high growth rates. At the same time, consumers seem to be experiencing Internet fatigue and are changing their buying habits.

Read more: http://www.nytimes.com/2007/06/17/technology/17ecom.html

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Uh... How about the fact that the economy is crashing (except for millionaire stock holders) and that Americans can afford less and less on their proportionality shrinking salaries. Maybe? Ya think?

[rusty charly]

1. and in our screwed up american #1-style capitalism

if it doesn't have an annual sales increasing more than 25 percent, it's an abject failure.

[silverweb]

5. Yeah, that one always cracks me up.

Once you reach a certain point, to expect ongoing continued growth is absurd.

How about being happy to reach a certain profitability and then just maintain?

[Double T]

9. The investors will never stand for it. It is double digit returns.........

regardless of how much EVERYONE else must give up or giveback.

[silverweb]

10. It's unsustainable.

One way or the other, that system eventually will crash and burn. My sad conviction is that innocents will, as always, bear the brunt of the crash, not the unscrupulous pigs who created the whole mess.

[Double T]

13. The 'little guy' ALWAYS gets hammered!

[silverweb]

15. Sadly true.

By the way, I love your sig line, "Live small and prosper." Sort of my own motto, in my little Baja casita.... :D

And I adopted two kittens a couple of months ago, too, who keep living small very entertaining! :hi:

[Double T]

17. Sounds like the perfect life. My best to you and your newly adopted furry friends.

[silverweb]

19. Thanks.

Here they are, Sable and Silver:



Keep the faith!

[Double T]

20. Beautiful cats! Thanks for the pic.

[blondie58]

26. they are beautiful!

I do volunteer work at this no kill cat shelter www.angelswithpaws.com and I have fostered many kittens. Unfortunately, I have been a 'foster failure' and have fallen in love with and adopted several of my charges.

You will have endless entertainment with those two! Enjoy!

[silverweb]

42. Thanks!

Bless you for the wonderful work you do at the shelter, too.

One reason I got these two was because my old cat, now 15, was acting bored. She had seemed to lose interest in almost everything except being held constantly, which was just impossible. It only took her a week to adopt the "bratzenheimer twins," as I call them, and they have absolutely turned her around with their antics. She is undisputed queen and they know it, but she also tries to do everything they do, from jumping to the countertops to sitting on my computer monitor (which, most fortunately, is an old heavy model not prone to tipping over!).

Endless entertainment, indeed. :D

[PurityOfEssence]

35. "Enough" is an un-American concept

This article also doesn't take into account something really simple: like all new technologies and cultural habits, they reach a certain equilibrium at some point. That's probably a lot of what's going on here: maybe all the people who are going to buy clothes online are already doing so, while the rest of the people like to go in and try them on first.

Regardless of this simple suggestion, I always go back to this: things are rarely caused by only one thing.

You're right about constant growth; it just can't happen smoothly if at all. That's why there are so many boom-and-bust cycles in our economy. No news here.

[kath]

40. Yes - how many of you know that when they get all upset about the Christmas sales numbers, it's NOT

because sales actually DECREASED - it's because they didn't *increase* as much as they wanted (or expected) them to. WAAAAAHHHHHHH.
I just realized this a year or two back when I read some of the articles very closely.

[silverweb]

43. Yup, every year.

It's because of their relentless commercialization of not only Christmas but every occasion that I pretty much ignore many holidays.

My sympathy rating for them?

:nopity:

[lovuian]

2. I agree Retail is in dire straits

we are looking at a recession a well hidden media recession but still a recession

[Lorien]

3. That's the reason I don't buy much online

or much anywhere anymore. Cost of living keeps going up while my income has been slashed due to outsourcing and a glut of unemployed artists in my field. Otherwise, I prefer shopping online to going to a mall or some such. No traffic to deal with, and it takes a lot less time.

[silverojo]

23. Yeah...it's kind of hard to buy online nowadays

When you have to choose between food on the table and some fun item from eBay, the choice is pretty clear....

[Purveyor]

4. "The slowdown is a result of several forces".... Number one being people are 'broke', tapped all the

home equity loans they could.

The 'bottom' of this economic crash is far from over...

[Melic]

6. oh well

Don't tell REI ... but I order stuff from them, pick it up at the nearby store, and *don't* buy anything else. shhh.....

I kept waiting for the Big Revelation in that article, and instead it just screeched to a halt. :) I don't consider buying things online "work" because I'm at a computer. That's not the issue. I think the issue is, can I afford it? I would also argue that impulse shopping online -- for some folks -- is a lot easier and quicker than impulse shopping in a bricks and mortar setting. So the numbers in the article might be optimistic.

[candice]

7. I'm trying to buy nothing so I can afford a physical one day...in addition

to the thousands I pay each quarter to the highly profitable insurance company for catastrophic care and to have any bills reduced to what they would be in the the insurance companies weren't skimming 1/3 of the health care costs. (I read they make 20+ % profit on individual policies.) Hey, a society based on consumerism other than the basics is over except for the ultra-rich. it costs more than half a million dollars to buy a shack in my area.

[Double T]

8. Your summary says it ALL. The jerks on wall street, in congress and in the WH...........

would rather make it different. The net has lost its' 'newness shine'; what a crock.

[sandnsea]

11. How about gasoline

Shipping is more experience which offsets the benefit of online shopping. Gas is more expensive which has hit the travel industry. Same thing that's causing retail numbers to slow. Oh, and people can't take money out of their houses anymore either.

[hlthe2b]

12. Exactly... Web-weary, my ass... Americans are cash poor...

and damned scared of the future given what this lying, thieving, despicable administration has done to our long term economic (and all other) prospects.

[zalinda]

14. Shipping prices have gotten out of hand

Shipping with the post office is insane, I can't believe how they jacked up the prices.

zalinda

[customerserviceguy]

45. Shipping is getting pricey

and not every sales experience translates well to the Web. Remember Pets.com? Giving free shipping on a 20-lb. bag of dog food was stupid, and as soon as you charge full freight, the "deal" doesn't look so good.

[MrSlayer]

16. Well they aren't losing any from me.

I buy almost everything on the web now. Internet sales are one of the best things ever.

[FloridaJudy]

22. Me too

If I could figure out a way to buy my groceries on-line, I'd do it. I hate having to drive, park. etc.

Years and years ago, when I was a child, and most families had only one car (if that), my mother used to call the grocery store and have our supplies delivered - usually by a kid on a bicycle, making money after school. We only used the car for major re-stocking, not for a quart of milk, a box of cereal and a dozen eggs. I frequently miss that service.

[Le Taz Hot]

27. And there, my dear,

is an idea for a micro business. :hi:

[pitohui]

36. a terrific money losing micro business

the cost of gas and car maintenance put those businesses out of business in the 70s for a reason -- and gas is WAY higher now, as is the cost of a vehicle in proportion to what you can earn

there is a reason you don't get home delivery of groceries, drugs, etc. any more and it's because nobody can afford to work and lose money just to bring things to your door

[Le Taz Hot]

37. Nooo

because you would be using a bicycle to deliver groceries so you have no outlay except for the initial cost of the bicycle.

Granted, you're not going to carry 100 lbs. of groceries but it is conceivable to have have packs on either side of the bike with one being a small ice-chest sort of set up to deliver perishables. Charge a small fee for delivery.

And you're wrong about drug stores. There are several in my area that provide free delivery.

Now, go rain on somebody else's parade. :P

[AzDar]

38. Here in AZ, there are a couple of grocery chains that let you order online, then deliver.

I was on total bedrest while pregnant 3 years ago, and not only did I do 90% of my grocery shopping on the internets, but I also furnished a nursery, and purchased all the necessary baby gear, too.
It was a real life-saver!

[kineneb]

31. rural folks will continue to order from the web

Our shopping choices are, ahem, MallWart(10 mile trip) or Kfart(25 mile trip). Needless to say, I rarely darken either's doors. I buy basics locally, including clothing from thrift stores. Things that are not available in-county, I buy on the web: art supplies (I have taken up oil painting), books, and computer parts. When I get out of the area, I usually schedule in shopping time to my trip, thus saving the shipping charges.

The raise in gas prices does increase the shipping, but it is a wash when I consider my driving time and use of my own car. A trip to the most "local" shopping area, with any of the chain stores, is an hour away.

A suggestion for those unwilling/unable to use a credit card online: get one of the rechargeable debit cards with the Visa/MC logo and use it. If someone gets the card number, they only get what is in that account, and no more. I will not own a credit card now, and I find my rechargeable card very handy.

[datadiva]

18. You know what?

I think its probably because most of us can't afford to buy anything anymore. I've lost so much in the last six years, I can't afford to piss. Sorry, just had to rant. I usually don't use bad language.

[burrowowl]

21. The economy is tanking

and most catalogs on the internet are poorly design and take to much time to search through oreven have blurred pictures.
Give me a paper catalog, a lot faster way of finding what you want and/or compare.

[Delphinus]

24. My thinking is right there with yours,

onehandle! I wonder how educated reporters can sleep at night, or look at themselves in the mirror. Spin, spin, spin.

[ananda]

25. I shop online..

.. to buy supplements, dvd's, and used books.
I even bought a cheap Dell laptop at the Dell
site a month or two ago, and it works fine.

Sometimes I can get things online a lot
cheaper than at the store.

I do use walk-in stores to buy products that
I need to look at or try on.. yarn, clothes,
food, etc.

Sue

[Boxerfan]

28. For me the issue is identity theft...I just had to deal with it & I thought I was very carefull

Frankly I doubt I'll expose myself to the dangers anymore. If I really need something from a online vendor I'm paying with a money order.
PS. I have a crappy "who would want it" credit rating & they still got me!

[kineneb]

33. check my suggestion in post #31

A rechargeable debit card is the way to go. We have no credit rating now (went through Chapter 7) and that is what I use online.

[rusty charly]

29. Allison Weiss Brady likes to be practical:

Allison Weiss Brady, 36, a venture capitalist and philanthropist who is on the board of her family foundation, said she likes to be practical when buying handbags preferring to buy bags in basic colors. Still, she spends $20,000 per season on accessories and typically spends $5,000 per bag, much more than the $2,000 she used to spend a few years ago. Among Brady's most prized finds recently is a multicolored lizard Fendi handbag for $4,960.

http://biz.yahoo.com/ap/070614/over_the_top_spending.html?.v=5

[tbyg52]

30. It wouldn't be so bad

If the people who *made* those bags were getting a decent share of that obscene price. But you *know* what the people who make them are making.....

[kineneb]

32. blech!

$20K/yr on accessories?? We live on $14K/yr! Talk about two different worlds...

[rusty charly]

34. You're just not being "practical" enough!

[FloridaJudy]

39. That's $20K a *season* - not a year

Or $40K - $80K a year. On accessories. While you and I are trying to decide between buying groceries or filling our prescriptions.

It's official. This is a third world country.

[blues90]

41. It's the crashing economy

Eveb the stores were all bent out of shape because sales dropped during last X-mas . It's not just online shopping it's everything from home improvement to electronics and yet in my email everyday there are at least 10 emails to start your own internet store and make big money selling cheap crap you don;t have to stock , see or pay for , Right sounds like a real winner .

[Vinca]

44. Who can afford to buy anything on or off line??

I've never felt so poor in my life. Buying a pair of shoes has become a major event and I couldn't tell you when I last bought items such as bedding or a towel (and we've got some seriously ragged towels).

[Lisa]

46. I figure it's less trouble to go into the local indie bookstore and buy something off the shelf ...

... than to wait for an online store to deliver, and factor in shipping costs as well. I do buy online sometimes (I'm in the town where Abebooks.com originated!), and the web is great for some obscure or hard-to-find stuff. But I still can't beat the feeling of going into a local place and finding a bargain, compared to just typing search terms into eBay (and never being entirely sure if the item will show up, or if there will be some hassle with the delivery).