The online population looked more than ever like the overall population in 1998, further indicating that traditional merchants without online sales channels risk serious loss of market share in coming years, according to information technology research firm International Data Corp.
An IDC survey of 2,000 adults confirmed that the online population has broadened well beyond its base of young, urban, relatively affluent males. One in three households with children has Internet access, IDC said, and the portion of the Web users who are women increased to 48 percent last year from 43 percent in 1997. Among home online users, 40 percent have been using the Web for six months or less and almost 60 percent have been going online only for the last year.
“If you don't serve these people, your competitors will,” said Barry Parr, research director at IDC's Internet and e-commerce strategies research program.
Parr said the last holiday buying season saw a large number of people make the transition from mere Internet surfers to buyers. The firm projects that the number of online buyers — a segment that is more price-sensitive than consumers as a whole — will boom this year. And Parr said direct marketers, who already are familiar with managing one-to-one relationships, have an advantage at going online.
“Technology is important, but it's not going to solve all the problems. You need to know how to take orders,” he said. “You need to be able to fill orders. You need to take returns, do customer service — all the things that the best online merchants are good at.”
And it's not just the big hitters who are changing with the times. Quietly and in increasing numbers, small-scale direct marketers also are building online channels. Bob Lickton, owner and proprietor of Lickton's Supply Corp., a bicycle retailer with eight employees, recently started selling through an online catalog at www.lickbike.com, abandoning the 64-page printed catalog the company had used for 25 years.
The business, which has operated from the same Oak Park, IL, location since Lickton's grandparents founded it in 1949, has seen a 25 percent increase in sales in the last year, many of them to customers in Europe and Asia. Lickton has doubled the number of items he carries, and the Web accounts for half of his shop's sales, a larger proportion than the printed catalog did. Now he's a complete Internet convert.
“I've been doing this a long time,” Lickton said. “We will never go back to a [printed] catalog again. I would say in five years, if you're not doing a Web catalog, you will no longer be in the catalog business.”
Parr sees many businesses changing in a way similar to the computer hardware and software industry, which has been revolutionized by Internet. Banks that don't provide online services will lose market share to institutions like Citibank that are pioneering the field, Parr said. Though online apparel sales have started slowly, he forecasts them increasingly taking place online this year. Businesses like classifieds, real estate and travel also will continue to be among the industries most heavily transformed by the Internet.
