Online Sales Remain Tiny Compared to the Offline Alternative

By any objective measure, ecommerce has become a behemoth. It has swallowed entire industries like books almost in their entirety, it has driven others like electronics to the brink and is poised for further growth.

Which is definitely a good thing if you are in that business, because in relative rather than objective terms it remains a rather piddling market at least compared to its potential.

It took the economy twenty years to get here, if Amazon's 20th birthday can serve as some sort of starting gun. This seems like a long time but also a sort of blink of the eye. And it provides some humbling perspective on how, in the majestic sweep of human existence, it takes to build something enduring and to then get it to scale. JL

Tom Gara comments in Corporate Intelligence:

Even on the friendliest turf for online shopping — computers and electronics — Internet stores are claiming just 25% of the market.
The shift to online shopping has already turned Amazon into a behemoth, and is often cited as a factor in the decline of traditional stores. And while it’s true that all the brick-and-mortar giants — sorry, we mean “four wall” giants — are scrambling to build out their own Internet operations, that’s only part of the story.
The other part is how small the online shopping industry still is, even as Amazon nears its 20th birthday. Here’s the size of online sales relative to in-store ones:
You could look at this in couple of ways. Perhaps it’s an affirmation of the continued lure of the physical store even as Amazon approaches its 20th birthday: even with such a well developed payment and logistics system now backing it up, online shopping still doesn’t appeal to the vast majority of Americans except in a handful of situations.
On the other hand, you could see it as a measure of how big the potential pie remains for those who are good at online retailing: Amazon and others have barely put a scratch on the markets for clothing, beauty products and toys, but someone eventually will. Stores still have plenty to lose.
Old-school retailers understand that, and are scrambling to defend their patch. One example as the WSJ’s Shelly Banjo reports today:

Sam’s Club is quietly testing a new subscription service that allows customers to order items like diapers and printer cartridges online, a sign the Internet is beginnng to threaten areas of retail that were once considered relatively safe.
Called “My Subscriptions,” the service mirrors Amazon.com Inc.’s Subscribe & Save program, which was launched in 2007 and has given the Internet retailer a foothold in sales of basic consumer products. Sam’s Club, a unit of Wal-Mart, is launching the service as Amazon prepares to move deeper into the business itself.