Purdue News
Purdue News
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November 23, 1999 E-commerce no threat to Indiana retailers this yearWEST LAFAYETTE, Ind. – Hoosier shoppers will spend between $100 million and $150 million online during the holiday season, but a Purdue retailing expert said there's no reason for traditional retailers to panic – yet. "The Purdue Retail Institute estimates that consumers will shell out $3.7 billion at Indiana retail stores during the holiday shopping season, while sales over the Internet will be between $100 million and $150 million – a fraction of the total dollars spent," said Richard Feinberg, professor of consumer science and retailing at Purdue University and director of the Center for Customer Driven Quality. "Total retail sales are expected to be up 7 percent over last year's figures, so Indiana stores don't have to worry about losing significant numbers of customers or dollars to e-commerce this season." According to figures from the National Retail Federation, Internet retailing is expected to nearly triple nationally to between $6 billion and $9 billion, which represents between 3 percent and 5 percent of all national sales during the period. The number of people making purchases online is anticipated to jump from 19 million last year to 28 million by the end of 1999. Feinberg said the impact on Indiana stores remains slight because not all Hoosiers have Internet access and of those who do, most do not buy online regularly. The Indiana businesses most susceptible to feeling the pinch from e-commerce are direct mail and catalog companies, although most have invested in their own Web sites to counter the trend. "Even under the best-case scenario, the Purdue Retail Institute is forecasting that nationally there will be 80 million regular Internet shoppers within the next five years with spending rising to possibly 8 percent of all retail sales during the period," Feinberg said. He added that the future of Internet shopping will depend on the Web-retailers themselves. "If consumers have a good experience online they will likely try it again, and if they have a bad experience, they won't," Feinberg said. "The holiday shopping season is a good litmus test because store-based retailers have lots of experience in anticipating popular items, hiring additional staff and making the overall atmosphere of their stores festive. E-retailers don't have that experience, and some will be caught off-guard by the crush of holiday season shopping." Feinberg said poor customer service, system crashes, site outages, out-of-stock items and late deliveries will alienate many e-shoppers, making it less likely that they will shop online next year. But he reminded traditional Indiana retailers that the potential Internet shopper is the kind of customer they should work to keep. "People who shop online generally have higher incomes and a higher level of education than whose who don't, and these are the kind of consumers retailers covet," he said. Sources: Richard Feinberg, (765) 494-8301, feinbergr@cfs.purdue.edu Writer: Sharon Bowker, (765) 494-9723, sharon_bowker@purdue.edu Purdue News Service: (765) 494-2096; purduenews@purdue.edu
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