A little Amazon history fro us today. When Amazon fist started, Jeff Bezos listed 20 items he felt people would buy online. The list included CDs (funny to think of now), hardware, software, videos and of course, books. For years, Amazon was primarily regarded as a bookstore by the public. Bezos always had a grander vision. He just had to convince us. And he did! When it comes to technology, we have a tendency to overestimate the next 4 years and underestimate the next 10.
1998 was the first year online sales became a thing to watch at Christmas. Online retailers were advertising in force. We had multiple specialty sites to choose from (e.g. eToys.com). The bulk of Americans heard of eBay for the first time in 1998. Sears was still one of the companies that made up the Dow Jones Industrial Average. Google had just received money from angel investors and was still years away from being used as a verb.
During Christmas 1998, 10% of shoppers made an online purchase. Total online purchases totaled $2.4 Billion that year.
Compare this to Christmas 2016 in which online retailers sold $91.7 billion. In 2016, Black Friday online sales were finally higher than brick-and-mortar sales. Online retail sales are going up across the board. In-store sales are down. The stores without a vibrant online presence are now fading quickly.
|Total Retail Christmas Sales||Total e-commerce Retail Christmas Sales||e-commerce % of Total Christmas Sales|
|1998||$390.7 B||$2.4 B||0.61%|
|2016||$655.8 B||$91.7 B||13.98%|
What is our Lesson Here?
In 1999, forecasts about the death of brick-and-mortar stores picked up significantly. These forecasts retreated when it seemed that the traditional storefront and ecommerce would coexist. Only in 2016 did we start to see serious closings:
We overestimate the next 4 years. We underestimate the next 10.
After experiencing the boom of the online1998 Christmas season, there were stories coming out of every news outlet predicting many retail stores closing. Real estate investors got nervous. The stores did not close, not for a while at least. What the smart brands did was expand their online presence.
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A retail purge has finally hit. It took 19 years for it to really come around. When it did, it was the weaker players that got hit.
When we see new technology, we often think this is going to begin affecting our lives in the next couple of years. It takes longer. When it does creep into our lives, it usually does in unexpected ways.
We are at the cusp of several technologies. Internet of Things, AI, Big Data, collaborative robotics. We will see all of these grow in the next 4 years, but slowly. In 10, it will seem bigger. Expect to way in 2027 “back in 2017, Big Data was the equivalent of amazon selling only books”.
Decide Consulting is a software and IT Staffing firm based in Houston, TX. Founded by veteran software consultants, Decide has developed proprietary methods for finding problem-solving IT personnel. Our Software products focus on the Environmental Health & Safety (EHS) and Healthcare markets.