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Glitches not withstanding, 1999 was a good year for electronic commerce. Thanksgiving weekend—on which many retailers traditionally rely to put themselves in the black for the year—brought record numbers of shoppers online. America Online said spending nearly tripled over 1998, with more than four million members making purchases. Yahoo!, one of the Internet’s most popular portals, or entry points, reported record shopping transaction volumes on November 26, posting an increase of more than 400 percent over 1998. The single most popular keyword entered into its search engine? Pokémon.
And yet there were glitches: The Toysrus.com web site, bogged down by thousands more visitors than it was designed to handle, often simply locked out disappointed shoppers. Even Amazon.com, king of the “e-tailers,” was slowed by surfers eager to plunk down credit cards for books, CDs, toys, and other products from the site’s extensive inventory.
While most e-commerce is done in the name of saving time and, thanks to a host of Internet incentives, money, there are other reasons for the phenomenal growth of online shopping. “Some people like the anonymity of the web,” says Amy Falkner, advertising professor at the S.I. Newhouse School of Public Communications. “They don’t want to answer someone asking, ‘How ya doing today?’ While some people like that service and will go to a department store for it, others hate it. And if they can get out of going to the mall and trying to find a parking spot, they will.”
The nature of e-commerce is the subject of numerous marketing studies, says School of Management professor Chung Chen. “Some people argue that this is a new form of commerce that could eventually replace a lot of existing market forms,” he says. “Others say consumers still like to go to traditional markets, so e-commerce is a complement rather than a supplement to the existing forms. But there’s no doubt that the volume of transactions and the number of industries getting involved in this trend are growing.”
The biggest growth in e-commerce is projected to come this year, and it will be in the area of businesses selling to businesses, says School of Information Studies professor Rolf Wigand, who directs the school’s new Center for Digital Commerce (see related story). “Electronic commerce is finally hitting home with businesses,” he says. “It’s not this year’s fad. This is going to be with us, and it will change the way we do business.”
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