Business-to-Consumer (B E-Commerce (2C) - Growth And Growing Pains, Falling Stocks, Fulfillment Foibles, Underlying Strength, Online Spending Growth Continued In 2001
Business-to-consumer (B2C) e-commerce has woven itself into the fabric of business and consumer relations. Major strategic alliances have been formed among e-commerce giants. Television advertisements for e-commerce Web sites are plentiful, and consumers and the business community generally seem to accept that B2C e-commerce is here to stay.
Even as the United States weathered a general economic slowdown in the early 2000s, online spending continued to grow, with consumers spending more on average with each online purchase. Meanwhile, stocks of leading e-tailers began to level off after losing much of their value in 2000. There was a general sense that the worst was over, and certainly long-term prospects looked good for B2C e-commerce.
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Swift growth has been perhaps the most celebrated feature of e-commerce. According to the U.S. Census Bureau, online shopping grew from $7.7 billion in 1998 to $17.3 billion in 1999 to $28 billion in 2000. Those figures are lower than other estimates of online consumer spending because the Census Bureau typically does not include online travel services, financial brokers or dealers, or ticket sale…
During 2000 the stock prices of many top online retailers fell dramatically as the stock markets in general, and technology firms in particular, suffered a broad and protracted sell-off amid investor concerns about future growth and general economic conditions. The E-Commerce Times Stock Index fell 82 percent from the end of 1999 through the end of 2000. The year 2000, as a result, was also the ye…
Despite difficulties, during 2000 online shopping continued to rise. Growth was attributed to new shoppers as well as to more spending by established customers. During the year online retailing received greater support from offline retailers who wanted to add new distribution channels and shore up their revenues. Strong ties to established brands in 2000 helped the growth of "bricks and cli…
Consumers spent a reported $3.4 billion online in February 2001, according to the National Retail Federation and Forrester Research. That represented a 13.3 percent increase over January, when consumers spent $3 billion online. Those figures compared to $2.8 billion for January 2000 and $2.4 billion for February 2000. In March 2001 online consumer spending reached $3.5 billion, according to Nielse…
B2C e-commerce is conducted essentially via three business models. …
Most pure-play e-tailers had little concern for profits when they first launched. They focused on acquiring market share, spending to gain new customers, and building their brands. They succeeded in driving traffic to their Web sites, but their margins were not enough to achieve profitability. As a result, many pure-play e-tailers went out of business in the wake of the dot-com shakeout of 2000. O…
By mid-2001 many considered the brick-and-click formula the leading model for success in online retailing. A study by McKinsey & Co. revealed that more than 75 percent of the best-performing e-tailers were online cousins of traditional retailers. Bricks-and-clicks had the benefit of existing brands, established marketing and distribution arrangements, and an installed information technology…
Portals such as Yahoo! and America Online (AOL) have evolved from being large directories that helped people find places on the Internet to places that offered their own content and services. Leading portals such as Yahoo!, AOL, AltaVista, and MSN all offer shopping areas for consumers. In June 2000 the top portal shopping site was Yahoo! Shopping, which attracted 5.8 million unique home-based vis…
As e-tailers seek to achieve profitability by cutting costs and spending less to gain customers, the ability to generate positive gross margins becomes the number one factor in e-tail success. Another critical factor is driving traffic to the Web site, but that needs to be combined with a high conversion rate. That is, it is important to have not only sustained visitor traffic, but also to be able…
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over 2 years ago
Gordon » gordonseokolo ((at)) yahoo dot com
the business-to-consumer is a very good model especially now that factories that are also consumers are selling their goods at high prices.