Posted by: nickgerlich | April 9, 2008

Big Wheel Keep On Turning

The news is rife with word of a tanking economy. The Fed says we’re not just in a slowdown, but may in fact be headed (or is it beheaded?) for a deep recession. And the bailouts being devised are the largest since the Great Depression.

So how’s your day going?

Shopping CartBut there is one glimmer of hope, one shining star amid the economic black holes, and that is e-commerce. Did you expect to hear anything less from an e-commerce prof and pundit? Probably not, but it’s the truth. And this truth is out there.

MSNBC.com reported yesterday that online sales are still chugging along with impressive double-digit gains over last year. Analysts predict a 17% jump in 2008. And while that’s not quite the same as the 20-25% growth notched in recent years, they say it’s not so much a result of the sagging economy but rather a sign of the medium maturing. After all, as your base grows, it is increasingly difficult to maintain the same rate of growth.

Not counting online travel purchases (airline tickets, car rentals, hotel reservations, etc.), e-commerce is expected to ring out at $204 billion this year, up from $174.5 billion last year. Can I get a cha-ching?

So while the overall retail picture looks grim, e-commerce is rolling down the river. Shoppers may be spending less overall, but they are spending more and more online.

With gas headed to $4 and my time bank account overdrawn, shopping online makes more and more sense with each passing day. But this consumer paradigm shift has far-reaching implications:

  1. As people spend an increasing amount of money online, it means that much less money spent at local businesses, both Mom-and-Pops and national chains.
  2. But at the same time, it also spells opportunity for all those Mom-and-Pops, who could just as easily be selling online as they could through their front door. I think of Dogologie, a small canine specialty shop in Fredericksburg TX that also operates a slick website. Can’t make it down to FBG? Then shop online. Suddenly, Hill Country is as close as your keyboard and mouse. And your dog will love those gourmet biscuits.

I suppose there is another thing to consider, and that is the job market for those in e-commerce will continue to flourish for the foreseeable future. It’s enough to make you want to pick up a book on HTML 5 and start expanding your skillset.

Just be sure you buy it online.

Dr “Add To Cart” Gerlich

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