Dot Calm?

Pfreemanevans | June 18, 2007, 09:05 PM

The New York Times on Sunday reported that the rate of online sales growth has peaked. This is true and it is as we have expected, and stated, for quite some time. But the way many people seem to read this is that growth has peaked and we will begin to see declines in year over year sales along with falling customer satisfaction. This is not the case. What is true is that the sea-change in behavior of consumers flocking to the internet to start buying is over. It is also true that customer satisfaction remains quite high online and is in fact higher overall than for offline experiences. The key news here that the Times rightly points out is that online retail is entering into a period of maturity where growth will be more organic rather than explosive. That means that the competitive fires will continue to heat up and as we have written in the past, retailers must step up their game in terms of differentiating their product, service and communication offerings. They must also rethink their efforts to drive loyalty, not just frequency, among their customers in order to maintain and grow market share.

Online retail is not over by any means. And if you add in the percent of offline sales that will be influenced by customers researching online, the internet will impact nearly half of all US retail by 2011 - that is more than $1 trillion. That is a whole lot business in my book.