Net Retailers Face 45 Percent Growth in Market

Written by Rob Spiegel

Continued from page 1

Among those retailers who did survive,repparttar news continues to improve. The report finds that online retailers have been able to reduce their losses as a percentage of revenues. Operating losses decreased as a percentage of revenue from 19 percent in 1999 to 13 percent in 2000. As forrepparttar 109022 elusive profitability, even more happy tidings. By Internet retail type, 72 percent of catalogers (sites owned by offline catalogs), 43 percent of store-based retailers (sites owned by brick stores) and 27 percent of Web-based retailers (Net-only retailers) are profitable at an operating level.

The report finds thatrepparttar 109023 movement toward profitability is due, in large part, to online retailers placing tighter controls on their marketing budgets. You think?. As a result, customer acquisition costs for all online retailers fell from an average of $38 in 1999 to $29 in 2000. Web-based retailers (the stickiest ofrepparttar 109024 wickets), in particular, were able to bring them down from a high of $82 (ouch) to $55 (still not great) overrepparttar 109025 same period. The best-performing Web-based retailers (the top 50 percent) reduced acquisition costs to an average of $14 (yea!) per customer rivalingrepparttar 109026 performance of catalog-based retailers.

The report concludes that Internet retailing is alive and very much healthy. Yet it also warns that each category of Internet retailer still has plenty to learn about running online stores. "Web-based retailers need to learnrepparttar 109027 basics of retailing," said Peter Stanger, vice president and leader of Boston Consulting Group's business-to-consumer topic area. "Store-based players are new to home delivery and selling to consumers one-on-one from a distance. Catalogers have a leg up in many dimensions, but they need to perfect ways to exploitrepparttar 109028 relationship-marketing opportunities. The winners will be those companies that can most effectively acquire or developrepparttar 109029 capabilities they lack and integrate them with their existing strengths." Amen.

Hats off torepparttar 109030 Net boom. They sayrepparttar 109031 king is dead. We say, long liverepparttar 109032 king.

Rob Spiegel is the author of Net Strategy (Dearborn) and The Shoestring Entrepreneur's Guide to the Best Home-Based Businesses (St. Martin's Press). You can reach Rob at

Ecommerce: A New Artform

Written by Rob Spiegel

Continued from page 1

Napster was a wonderful example of this. A teenager was able to create a service that was quickly utilized by millions upon millions of users. Of course Napster had a glaring flaw:repparttar company was trading in products created by others, and trading withoutrepparttar 109021 consent of those who producedrepparttar 109022 products. Butrepparttar 109023 heart ofrepparttar 109024 matter is that someone without substantial resources could build a highly-used, well-recognized brand out of little more than a creative idea. Usingrepparttar 109025 same infrastructure, surely someone will come up with another intriguing idea that will capture our imagination and a big audience, and it will probably happen soon. Andrepparttar 109026 next wave of creative Internet entrepreneurs will have learned fromrepparttar 109027 Internet crash and its aftermath.

The Internet isn't dead. It's just stumbling a bit while taking its toddler steps. Internet start-up ideas will continue to attract creative people, simply becauserepparttar 109028 free infrastructure invites innovation and resists control. Control isrepparttar 109029 deathword to creativity. Creative people have shunned business for that reason alone. Yet in a world where creativity and innovation becomerepparttar 109030 critical elements for success, you bet creative people will begin to see commerce as an avenue of expression.

Duringrepparttar 109031 high days of Internet exuberance, I used this column to makerepparttar 109032 claim that business will berepparttar 109033 creative medium ofrepparttar 109034 early 21st century. I still believe it's true, simply becauserepparttar 109035 basic elements still exist a encourage a creative approach to business. The resources to support a new company do not require control so much as creative manipulation. Given this free and open canvas, creative people will rush in, despiterepparttar 109036 lingering notion that business is somehow anti-creative.

Rob Spiegel is the author of Net Strategy (Dearborn) and the upcoming Shoestring Entrepreneur's Guide to Internet Start-ups (St. Martin's Press). You can reach Rob at

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