Column: E-Retailers Are Still Hot On The E-Trail

As Mark Twain once said, "The reports of my demise are greatly exaggerated." And so is the hubbub we're hearing about the death of e-commerce.

Despite headlines screaming eulogies for online shopping, the fact is that the number of people shopping online continues to soar. The 1999 holiday shopping season hit record-breaking numbers, and the numbers continue to grow as people find that the convenience and accessibility of online stores suits their busy lifestyles.

In fact, America Online CEO, Steve Case, has said of the Internet, "Never before in history has a new medium reached so many people so quickly and had such a profound impact on their daily lives."

As the 21st century unfolds, that impact will resonate even deeper, thanks to a new crop of enterprising e-businesses and technologies. The Web and related technologies are poised to deliver a new level of convenience to our daily lives.

Coming soon will be the ability to surf onboard airplanes. With more than 1.5 million passengers flying U.S. airlines every single day, there is a tremendous audience. Several companies are vying to be the first to bring onboard surfing to commercial airliners, with a forerunner, BT Skyphone, a venture of British Telecom, announcing that it will provide service by mid-2001.

Whether it's keeping us busy while we fly, or flying around doing errands while we're busy, the Internet boasts a host of new ways that make life more convenient. For example, online grocery stores are taking hold, with projections that this marketplace will grow to $3.5 billion in 2003, according to Jupiter Communications. Of course, it will remain to be seen if online grocery shopping can make a dent in the estimated $400 billion U.S. grocery market.

Consumers and business users moving to the Internet in droves is one reason for the eminent success of e-Shopping. Another is that a big chunk of the dollars behind the growth of e-Business comes from online advertisers. In fact, in 1999, advertisers spent more than $4 billion on banners, links, sponsorships and emails. That's more than double the $1.9 billion spent in 1998, according to the Internet Advertising Bureau.

How does this huge cash infusion affect individual Web sites? The typical site gets 53.5 percent of its revenues from advertising. That makes quite an impact on their operational budgets. And the number is projected to increase. Even at free media sites, such as MSNBC.com, they reported ad revenues quadrupling in 1999.

But the Internet isn't just about consumers. More and more companies are turning to the Internet to facilitate their operations. Traditional businesses are also getting into the act, finding ways to use the Internet for e-Customer Relationship Management, e-Procurement, and the ability to reach a global audience.

For example, the supply chain is going online, according to a Deloitte Consulting Study, which surveyed 200 global corporations to assess their adoption of e-Business technology and strategies. These companies reported that they are quickly moving into electronic purchasing and supplier networking. E-procurement is already proving to be an investment that quickly pays for itself.

And e-Business isn't just for start-ups. One of America's largest companies, General Motors, is now using an online supplier network, which was created by Commerce One. Like many e-Procurement companies, Commerce One is getting the attention of Wall Street. Its stock was up 1,300 percent in mid-May since its initial public offering on July 1, 1999.

While some people may lament that the Internet and computers are taking away from the humanity of doing business with one another, the Massachusetts Institute of Technology's (MIT) Media Lab is doing something about it. The computer engineers at MIT are creating a modern-day HAL that can react to human emotions. These small, but powerful computers, worn as jewelry or clothing, use bio-sensors to detect the physical clues to the user's emotional state. Maybe someday, you'll just squeeze your Dick Tracy-like computer watch and a box of chocolates will be delivered to your desk.

Mark Evans is managing director of the Technology & Communications Group, Deloitte & Touche.