E-commerce Trends--Direct Marketing, Mail Order, E-commerce News

Direct Marketing, Mail Order, and E-commerce News from the National Mail Order Association

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E-Commerce: Ten Years Later

Now a full decade old, e-commerce amounts to a $140 billion business.

Long gone are the days when Web sites crashed and online retailers burned through
investors' money. Today, Internet retailers offer a stable shopping environment, and
many are showing a healthy profit margin. At the same time Internet users are
becoming more sophisticated in utilizing multiple shopping channels to research and
buy products.

In its new report, E-Commerce in the US: Retail Trends
(http://www.emarketer.com/Report.aspx?ecom_us_may05), eMarketer briefly
reviews what has happened over the decade since the first online purchase and looks
ahead to the future of e-commerce.

"The demographic profile of the online shopper has evolved since the early days of
online shopping," says Jeffrey Grau, eMarketer Senior Analyst and author of the
report. "In its infancy online shopping was the purview of well-educated, high-earning,
20- and 30-year old single, white males. Today online shoppers closely resemble the
US population as a whole."

Forrester Research (http://www.forrester.com/) captured the changing demographic
profile of the online shopper in two years worth of recent data. Between 2003 and 2004,
the average online shopper became a year younger, was more likely to be female, less
highly educated, with slightly lower household income, and increasingly accessed the
Internet through a broadband connection.

"Online shopping is one of the most popular Internet activities and online buying one
of the fastest growing Internet activities," says Mr. Grau.

According to A Nation Online: Entering the Broadband Age, a September 2004
report from the US Department of Commerce, National Telecommunications and
Information Administration (NTIA), searching for product/service information is the
second most popular online activity after e-mail or instant messaging. In 2003, 76.5%
of Internet users ages 15 and over indicated they researched products online. Meanwhile,
the fastest growing Internet activities between 2001 and 2003 were purchasing
products/services and banking online — both transactional activities. Product purchasing
increased by 8 percentage points from 44.1% to 52.1% while banking online grew by
10.4 percentage points from 17.4% to 27.8%.

"Online retailing has arrived as a profit engine with double-digit operating margins because
retailers have found the right balance between selling a product, acquiring and retaining
customers, and earning a profit," says Elaine Rubin, Chairman of Shop.org.

The e-commerce landscape, once dominated by Internet-only retailers, is now a mix of
online and traditional retailers' Web sites. The presence of comparison-shopping sites,
such as Shopping.com, Yahoo! Shopping and Shopzilla among the top retail Web
properties, as reported by comScore Media Metrix (http://www.comscore.com/), is
evidence that consumers are using the Internet to compare products and retailers.