Dot-Coms

An important element in the rise of dot-commerce is the plain fact that most shopping is done by women—and women are busier than ever. Studies and surveys support this. A Reuters story, for example, headlined the fact as follows: "In terms of purchasing, it's a woman's world." Reuters then cited data from NDP, a market research firm. More women work than ever before. The female workforce participation rate in 1950 was 33.9 percent, had risen to 51.5 percent by 1980, stood at 59.2 percent in 2004, and was projected to 59.7 percent by 2014 by the Bureau of Labor Statistics—but BLS projections in the past have tended to be too conservative. Meanwhile male participation rates have slowly slipped. Pressured by work and family demands, women find it very handy to accomplish particularly seasonal shopping chores online. A consequence of this has been very dramatic growth in e-commerce even as the institutional base of that commerce (the dot-coms themselves) was sorting itself out.

SOARING SALES

The compounded annual growth rate of total retail sales in the U.S. was 4.8 percent a year between 2000 and 2005. In the same period, online retail sales rose at a staggering annual rate of 26 percent a year. E-retail is still but a tiny fraction of total retail (2.3 percent in 2005), but it was almost invisible in 2000 (0.9 percent). This sector, which is regularly tracked by the Bureau of the Census (whereas industrial online sales are not), had sales of $27.2 billion in 2000 and $86.3 billion in 2005. The dot-coms that had survived the bust have done very well indeed—as have countless small sellers on the Internet who never tried for high visibility but, instead, simply allowed the search engines to find them.

THE SMALL BUSINESS PERSPECTIVE

Small businesses that create a Web site in anticipation of boosting sales are likely to have one of three kinds of experiences. They may experience no sales at all, hardly even an inquiry—and those few that come are off the mark: the visitors are non-buyers or buyers who didn't bother studying the page. Others may experience sporadic sales activity—but insufficient to organize the channel properly because the transactions are few and far between. Yet others experience a slow start but begin to feel an increase in volume; this motivates them to build up the site, to feature specials, to capture the buyers' particulars in a database, and to spend money on direct mailings to such customers when special promotions provide an opportunity.

Assuming that all things are equal—that all the sites are well-designed, attractive, and have appropriate arrangements for accepting credit cards—success will likely to be due to factors that especially favor the dot-com mode of distribution.

Three factors are most important. First, the product or service should be difficult to find by just hopping in a car or picking up a phone. Consumers won't turn to the Web if they can easily find the product—but difficulty getting what they want will drive them to the Internet these days, and the business they find is likely to make a sale. Second, and alternatively, the product should be seasonal in character to take advantage of the busy shopper's determination to stay out of traffic and crowded malls. If a seasonal product, in addition, is somewhat unique, so much the better. Third, the product or service should be easy to find on the Web—which translates into thoughtful Web design. The price, of course, must also be attractively low.

Unique products need not be mass-market products but they should be difficult to find. Examples are specialized tools and supplies, e.g., caning supplies for someone wishing to refinish a chair; hand-made rag dolls or components for making your own; ethnic clothing, decorations, flags, emblems; unusual musical instruments and sheet music; and many other items of this nature.

The biggest shopping season is Christmas—but Valentines Day, Easter, Mother's Day, Thanksgiving, and Halloween are also busy times for women who then try save time by turning to the Internet. Events such as weddings, Christenings, birthdays, Bar mitzvahs, and funerals may come at any time and present opportunities. It is interesting to note in this context that the flower business, highly seasonal, developed a distribution system based on telegraphic communications long before the Internet was born—and, furthermore, that that business has now migrated to the Internet too.

Search engines gather their information by using so-called Web-crawlers. These crawlers visit new and updated Web-sites and gather information about them automatically. Keywords gathered are then fed to the search engines along with other links used by the site. Some sites are designed in such a fashion that crawlers give the site low rankings for a variety of reasons. Sometimes a site ideal for dot-commerce may be very attractive on the screen but, internally, may be designed so that search engines do not feature it properly. For this reason, expert help in site design is well advised to make sure that the page has optimal visibility.