Know what? About 90% of all new businesses fail. Period. Product, service, bricks-and-mortar, mail order, B2C, B2B, A2Z - you name it. It happens for any number of reasons: bad planning, poor location, shabby customer service, short-sighted management decisions, insufficient cash flow, weak marketing, and more. But no matter how you slice it, lasting commercial success comes to very few. So why should we expect e-commerce to be any different? We've got to ask an even louder “why” when we look at the fact e-commerce has only been around for a couple of years. Heck, we’re still just figuring it out.

Venture capitalists who couldn’t wait to pour in cash just a few months ago suddenly have been afflicted with a deafness of Biblical proportions when they hear “dot com.” The NASDAQ has beaten the dot coms to a pulp. And, sadly, some pretty innovative and strong players are biting the dust. Word on the street, word in print, word online, word on the air: Internet B2C is dead. Just one problem: nobody told the consumers, who keep buying more and keep buying more often.

Admittedly, some of us forgot to buckle the belts on our Reality Seats, but what's going on out there is not the Decline of Western Civilization a la Web. All we are witnessing is that old, familiar pendulum swinging back from its latest peak. So it turns out the Internet isn’t a get-rich-quick machine that defies all logic and all history. Big surprise. The thing to remember about a pendulum is that it keeps swinging.

Fortunately, there are folks out there who view all this for what it really is: a bump in the road of continuing e-commerce progress. And what they are saying should be music to your ears.

EMarketer co-founder Geoffrey Ramsey predicts that despite a slowdown in growth, 2001 will see e-commerce sales increase 57% over year 2000 figures. "The fact is that the Internet is not going away, and we're going to continue to see a migration of dollars," says Ramsey. "E-commerce is chugging along … It's a snowball that's grown and grown, and people [who] have bought online before will continue to buy online, and they're going to buy more," although, "businesses are really having to tighten their belts and [get] smarter about running their business."

A separate forecast by Gartner Group, Inc., predicts the North American Internet retailing market will grow from $16.7 billion in 1999 to $142.4 billion in revenues by 2004, a compound annual growth rate of 53%!

Nice, non-scary numbers, huh? But to get there, we're going to have to make some changes. Stephen Dull of Andersen Consulting reminds everyone that Internet-based commerce as it is currently being practiced is not close to meeting consumer's needs. "Half the people we surveyed are neutral to very disappointed with current Web offerings. That's an enormous well of dissatisfaction. No business can survive with that strength of dissatisfaction."

I probably sound like a broken - uh - CD, but instead of focusing precious dollars on marketing, advertising, promotions and price discounts, e-tailers need to pay attention to creating value for their customers and earning loyalty. They need to rethink their privacy policies and the value of personalization, support more than the “idea” of Customer Service and get real about the consumer's desire for speed rather than media richness (to name just a few).

Mark my words; the pendulum will come back. Already, wide scatterings of seeds are being sown for a "Back to Basics" movement in e-commerce as, right and left, folks are recommending stuff like "knowing one's customers", "delivering a Web experience that customers really want" and "earning money" (you will recall this is e-commerce). Of course, folks are also recommending it's a good idea to have enough capital to ride out the bumpy spots along the way!

Personally, I think Dana Blankenhorn, in his inimitable style, has said it best:

"To many reporters, especially those with friends who lost their careers reaching for dot-com riches, [this downturn] proves the lesson of Dorothy in "The Wizard of Oz." You should stay home, you shouldn't take risks, and there's no place like home. But the real lesson of the film is different: Everyone grows up, and without adventure the world's just gray. …

"Even if you loved a start-up and lost, however, you've had an adventure and are ready for another one. Another ship will beckon and another and another. Some will founder, but some are bound for glory. The only way you'll know which is which is to get on board."

So are you going to hibernate, or are you going to meet the challenge? Check the weather, dress right, and get going. And oh, yeah … don't let that pendulum hit you in the backside on your way out the door!

1 "E-Commerce to Grow 57 Percent in 2001." Jon Weisman, January 8, 2001. E-Commerce Times.
2 "Retailing Web Sites Face Tough Future." Candace Talmadge, December 24, 2000. Internet Report.
3 "Retailing Web Sites Face Tough Future."
4 "Start-Up Love Will Go On and On." Dana Blankenhorn, January 11, 2001. ClickZ. <http://www.clickz.com/cgi-bin/gt/print.html?article=3152>