Three Percent

Retail ShoppingThe Census Bureau of the Department of Commerce has announced that U.S. retail e-commerce sales for the fourth quarter of 2006 were $29.3 billion, an increase of 4.6 percent from the third quarter and 24.6% above the fourth quarter of 2005. In fact, the year to year growth has been more than 20% for every quarter since it has been tracked back five years or so ago. The impressive double-digit growth rate is more than triple the growth of retail sales overall. E-commerce has now reached 3% of total retail sales
Why isn’t it 20% instead of 3% ? There are many reasons — most of them are not technology related. Other than the major sites, many web businesses have lame web pages that ask you to re-enter a date because you forgot the dashes, or re-enter the date because no dashes are allowed, or enter your favorite color and then tell you it must be at least five characters in length (nix red, blue, gray, tan, pink), or make bold statements about how their e-business is there for you 24×7 and then displays a page that says "sorry, our web site is temporarily unavailable", or "you can’t there from here" error messages . When it comes to concerns about security, identity theft, and privacy, I am optimistic that these issues will be adequately addressed. However, the ease of use issues require a shift in attitude to solve. I must confess that I thought this would be well understood after a decade of e-commerce but we clearly have a long way to go.
As eBay and Amazon continue to grow and show real profits to the world, business leaders are paying more attention. The free markets are driving competition and innovation is beginning to kick into high gear. We have barely scratched the surface of what is going to happen. It will never be 100% of retail but I can see it getting to 25% which will make it a trillion dollar business.