Monday, December 29, 2008

Online sales numbers

Underscoring the maturing of the overall online commerce segment of the Internet, The Wall Street Journal is reporting that online sales were off by 2% from Nov 1 through Christmas Eve. Relatively, this was not so bad as overall, retail was down 6-8%. The sheer numbers of US shoppers who visit each of the major sites highlights a maturing US channel (per Quantcast):

Ebay 64mm
Amazon 54mm
Walmart 37mm 20mm

It seems to me that the 'advantage' to the consumer of shopping online vs physically is narrowing. Hand held smart devices going mainstream now gives instant access to verify pricing 'fairness' and the well known pro's and con's of physical vs online shopping seem to be heading towards a market share balance.

Overall, I sense a feeling, excepting Amazon, that innovation in online selling seems to have stalled. Looking at leading sites that included AAPL, Best Buy and eBay, I was struck by how little improved was the shopping experience. Moreover, the price advantage inherent in a business model where efficiencies in labor and real estate ought to translate into better pricing seems to have disappeared.

In my view, absent new innovation in the online experience/value, the halcyon growth days of explosive commerce growth are behind us.

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