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News-Sentinel.com Your Town. Your Voice.
Opening Arguments

Attention, shoppers

The brick-and-mortar sector isn't crumbling as quickly as we might think:

So what percentage of retail business in the United States would you say is done online? In my world, where people seem to be using their iPads to buy new Kindles, the answer feels like 90 percent, and certainly no lower than 60 percent. Maybe you run with a more old-school crowd, but the figure must be at least 20 percent, right?

Wrong. According to the U.S. Census Bureau, a mere 3.8 percent of retail business in the United States falls under the rubric of “e-commerce.” Some analysts say this figure is an underestimate, but even the broadest definitions put e-commerce at no more than 8 percent of total U.S. retail.

True, e-commerce is nothing to sneeze at, with revenues of nearly $140 billion in 2009, according to the Census Bureau. But we're almost two decades into the commercial Internet, and for a good 15 years the conventional wisdom has been that if you are not devoting 100 percent of your efforts to digital transactions you are moments away from becoming a bump on a deer caught in the headlights of a horse and buggy. How can the Internet still be playing such a small part in our lives?

[. . .]

Since the Census Bureau began keeping track, e-commerce's share of the retail pie has grown at about 0.1 percent each quarter, but the rate can vary greatly by sector. Sales of automobiles are not highly susceptible to replacement; online grocery shopping, a fad that peaked during the dot-com boom but lingers in some big cities, may never take the place of supermarkets. But even areas ripe for electronic replacement grow only gradually. Despite the popularity of Amazon's Kindle e-reader, Friedland estimates more than 90 percent of the company's book sales are still on old-fashioned paper.

Some of us (I include myself) tend to overestimate the speed of change. In my case, that tendency is partly fueled by the fear that my industry will be among the early victims of that change. But there's also an element of expecting people to do the "sensible" thing. Online shopping is easier, cheaper, more fun. Why wouldn't people embrace it immediately? Because that's not what people do. "Old habits etc." is a cliche for a reason.


Lewis Allen
Tue, 06/22/2010 - 8:35pm

I think the real genius will be the man (or woman) who can figure out how to combine the social experience of traditional shopping with the convenience of shopping online. Like maybe making an online game of it. Shopping is, after all, mostly done by women, and they tend to shop with friends and family.