To E Or Not To E: Retail Holdouts Ponder

As e-commerce works to establish itself as a mainstream phenomenon, many traditional brick-and-mortar retailers have taken a wait-and-see attitude toward expanding their enterprises online.

Some saw ominous signs that suggested an early rush to go online would not be prudent. Volume businesses, for example, have been cautiously noting that the conversion rate of online shoppers who really make purchases at the Web sites they visit is as low as 1.5 percent, according to some estimates.

While some industry analysts predict the holdouts will be sorry for their hesitation in going online, others say that there is plenty of time to wait for a shakeout of the first wave of e-tailers.

Many of the fence-sitting retailers, for example, have profit-conscious investors who may be uncomfortable absorbing large losses on the Web.

Looking Like A Good Move

The retailing holdouts were given something of a counterpoint this week by a new survey released by International Data Corporation (IDC) that found 29 percent of Web sites reporting that sales were higher than expected and 55 percent reporting that sales were in line with their holiday forecasts. The survey, conducted December 13 through 15 among 50 online merchants, included established businesses, as well as startups.

Furthermore, another study by BizRate.com found that orders to their 2,700 online client businesses were five times higher than what they were last year during the same week ending December 18.

Writing On The Wall?

If there were any doubts that the time may be coming to take the online leap, Kmart, Best Buy and Wal-Mart may have ended them with their recent online deals with ISPs. With the largest brick-and-mortar retailers taking the online plunge, those who sit on the fence and wait may soon be seen by their shareholders as behind-the-times instead of as prudent.

Interestingly, the likelihood that numerous fence-sitters will now take the plunge into e-tailing could have an impact on the supposed shakeout that numerous industry analysts expect will take place after the holiday season ends.

Instead of a bloodbath of start-ups who can’t get further funding, we could well see a new wave of partnerships, mergers and acquisitions as fence-sitting retailers make their moves online by acquiring existing operations to give them an instant Web presence.

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