The Missing Link: Connecting Physical and Virtual Channels Through Click and Mortar Electronic Commerce

Abstract

Many observers became disillusioned with consumer-oriented electronic commerce after the so-called Internet bubble burst in 2000 and 2001. Yet, without much fanfare, annual revenue from online retail sales has steadily increased, in both absolute terms and as a percentage of total retail sales. In the United States, the U.S. Census Bureau has tracked online sales since the fourth quarter of 1999 using a panel of approximately 11,000 retail firms. According to the most recent Census Bureau estimates available at the time this chapter was written, quarterly online sales have risen from 5,393 billion, or 0.7% of total sales in the fourth quarter of 1999 to 13.77 billion, or 1.6% of total sales in the fourth quarter of 2002 (US Census Bureau, 2003). Other sources report much higher figures, largely because the U.S. Census data does not include sales from such popular online purchases as financial services, travel and information2. Moreover, further evidence of the increasing importance of consumer e-commerce is revealed in the online sales growth rates, which vastly exceeded traditional retail sales growth even during the period following the collapse of the dot.coms. The most recent revised figures from the U.S. Census Bureau show that from 2000 to 2001, total retail sales reported by the U.S. Census Bureau increased by only 2.66%, while online sales increased by 22.2%.

I would like to acknowledge the support of the Telematica Instituut, Enschede, Netherlands, as well as Delft University of Technology and Michigan State University for their support of the research reported here.