Sunday, June 17th, 2007 by Brittany Thompson

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Is It the End of the eCommerce World as We Know It?

By Brittany Thompson

The New York Times stirred up a bit of controversy today by publishing an article claiming that the eCommerce industry is slowing down. Referring to the current state of online sales as “the Dot Calm Era,” the article uses current trends, research statistics and even word-of-mouth to back this theory.

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

A report released on Wednesday by market research company Forrester Research anticipates online sales will rise 18 percent in 2007. Online sales, including travel, are expected to reach $259 billion by the end of this year, with apparel leading the way. Looking at the bright side, the online retail business is not on a downslide. On the contrary, eBusiness is still growing – even if it’s not growing as quickly as previous years.

While the New York Times article discusses how San Francisco retailers are trying to get more in-store shoppers by “livening up” their stores and trying “to be more alluring,” it fails to mention the fact that most online businesses have been doing the same thing. Rich media content, more accessible designs, and hip, vibrant colors are all common themes among online retailers.

Critics believe that the New York Times might be publishing the article as a way of blaming online retail woes for its own financial struggles or using hype to gain readers. Over at Threadwatch.org, “lots0” was skeptical: “The NYT is looking at huge losses… Gee, I wonder why they would spread false rumors that the end of the Internet as we know it is near, very near.”

Meanwhile, “ghoti” took a very hopeful approach after reading the article:

“There’s no decline in sales… It’s just a slower increase in sales. … Why would it surprise anyone that growth slows down as you reach higher market penetration?”

Taking all of this into consideration, I think it’s fitting to end with one of my personal favorite R.E.M. lyrics:

“It’s [not] the end of the [eCommerce] world as we know it… and I feel fine.”

About Brittany Thompson

Brittany Thompson is the founder of SEOForumWatch.com as well as a graphic and web designer. In addition to writing for Marketing Pilgrim, she’s been published by WebProNews and WebProWorld.


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8 comments on “Is It the End of the eCommerce World as We Know It?”

  1. Brian Chappell Says:

    June 17th, 2007 at 11:00 pm

    We might be in a bubble of sorts at the moment with regards to shopping online, however it is my firm belief society will only get lazier and lazier as time goes on. Ecommerce def. isn’t going anywhere.

  2. Terry Howard Says:

    June 18th, 2007 at 8:12 am

    I’ve come to expect that newspaper journalists are going to totally not get anything to do with the online world. I can’t respect the analysis of anything tech related from an industry that has still not figured out the importance of actually linking to a website an article is mentioning.

  3. Speedlinking #1 | Jadehat, the SEO consultant Says:

    June 18th, 2007 at 11:15 am

    [...] Brittany Thompson makes a guest post on the Marketing Pilgrim about the end of the ecommerce era. (Hasn’t it ended in June 2000? No? Oh, weird). [...]

  4. Is eCommerce Growth Grinding to a Halt? » eCommerce Cache :: Varien eCommerce Blog :: A blog focused on the design, marketing, and implementation of online commerce Says:

    June 18th, 2007 at 2:01 pm

    [...] The New York Times caused a bit of a stir yesterday when they published an article headlined “Online Sales Losing Steam” where they proceeded to all but foresee with their magical truth-telling crystals the death of shopping online. Using research statistics, market trends, and even interviews to illustrate a slowing online growth, they attempted to downplay as much as possible that the market is still growing at a rate that would make quite a few markets offline sob with glee. Is this slowdown a turning point for eCommerce? Well, the Times sure wants you to think so. Obviously, the growth of several markets in eCommerce are slowing, but certainly not going away. This response to the article notes, A report released on Wednesday by market research company Forrester Research anticipates online sales will rise 18 percent in 2007. Online sales, including travel, are expected to reach $259 billion by the end of this year, with apparel leading the way. Looking at the bright side, the online retail business is not on a downslide. [...]

  5. Steven Bradley Says:

    June 18th, 2007 at 2:53 pm

    I think the Times article is a bit misleading, perhaps due to its title. Ghoti is right. This is about slowing growth, which is to be expected.

    As far as companies using websites to direct people to in store shopping I think it’s simply that they’re finally figuring out how.

  6. Terry Howard Says:

    June 18th, 2007 at 3:01 pm

    I think you might have something there. With the rise of local search and the attention it is getting now, websites have been able to assist in directing people to meatspace stores and not just serve as only an online shopping cart.

  7. Brittany Thompson Says:

    June 20th, 2007 at 8:39 pm

    Jadehat, we’re past the Bubble and eCommerce GROWTH is slowing; however, eCommerce itself not quite dead. If that were the case, there wouldn’t be very much need for SEO, high rankings or good web design.

    The eCommerce world is changing. I believe Terry and Stephen might be onto something. Could it be that we’re finally at a turning point where websites don’t have to limit themselves to just being online shopping carts? Savvy eBusiness owners will take notice of consumer trends and find ways to adapt to the needs of their customers, whether through providing online purchases or pointing the consumer to a local store.

  8. This Week In SEO - 6/22/07 - TheVanBlog Says:

    June 22nd, 2007 at 9:04 pm

    [...] Is It the End of the eCommerce World as We Know It? [...]