A Correction and a Promise

One of the risks of putting a prediction down on paper is that, sooner or later, it may prove to be wrong.

Case in point: One of my predictions made a mere month ago was proven to be off base by a strong online holiday shopping spree. In the Dec. 9 issue of ENT I suggested that the lack of a universal electronic cash system would continue to hobble the use of the Web for online shopping.

According to the Wall Street Journal, AOL users spent $1.2 billion during the holiday shopping season. That breaks down to about $80 per AOL user. Amazon.com also reported a big jump in sales, $250 million for the fourth quarter vs. $66 million for the fourth quarter the year before.

Analysts estimate that a full year of online purchases in 1998 generated about $13 billion; the 1998 holiday spending online was estimated to be about three times that of the year before. Yet, those numbers pale compared with total holiday shopping expenditures, estimated at $167 billion for the 1997 holiday shopping season.

I didn’t personally contribute anything to online shopping revenue this year, partly because I am uncomfortable submitting my credit card online. But there are other factors, including the fact that I dodged most of the holiday shopping responsibilities in my household. Plus, I actually enjoy wandering around in stores, picking up things and reading the boxes before purchasing anything.

After reading these reports I began to wonder if I was out of synch with the rest of the world. So I conducted one of my highly unscientific straw polls among friends and co-workers to get a sense of who spent how much online. The results surprised me.

Oddly enough, some of the folks you would expect to be candidates to use online commerce, including several high profile ENT columnists, didn’t spend anything online during the holidays, although most spent something during the year -- generally small amounts. One columnist researched a new car purchase, tried to buy it online, then eventually found himself in a showroom. The online attempts were, in his words, "a flop." He bought nothing else online all year.

Keeping in mind that I polled people who are online daily, have access to good computer equipment and high-speed connections, I found that only 16 out of 41 respondents purchased holiday gifts online, with all but four people spending under $250. On the other hand, 30 out of 41 made nonholiday purchases online. Eleven people didn’t make any purchases online whatsoever during 1998. Several people who participated in my poll expressed nagging concerns about the safety of their credit card numbers, even though those concerns didn’t stop most of them from buying online.

As a group, only two ENT staff editors did not make an online purchase during 1998 -- including me. Another interesting point: Not one person made a holiday buy as his or her first online purchase of the year. Comparing holiday purchases with nonholiday purchases, in only one case did a person spend more on holiday purchases online than he or she did on purchases during the rest of the year. Satisfaction levels with online buying experiences, on a scale of 1 to 10, averaged at 7.2.

One of my coworkers, who’s a firm believer in online shopping, spent between $501 and $1,000 on holiday items and challenged me on my fear of sending my credit card over the Internet. Don’t I send it to catalog companies via mail and fax, and read it over the phone to everyone from hotel clerks to mail order clerks? I sure do.

I called one of my credit card companies and spoke to a customer service agent -- who also has not purchased anything online -- and she reassured me that my card is safe to use for online shopping. This card has a system in place to identify fraud that, when triggered, freezes a card from making more transactions. In fact, I was surprised to learn that should my card number be stolen, my liability is $0.

A recent report by International Data Corp. (www.idc.com) predicts that during 1999, 50 percent of U.S. households that are online will make an online purchase.

All that said, I now see that I’m in danger of being renamed "Jurassic Al." One of the best things about admitting you were wrong is that you feel less guilty about taking an "if you can’t beat them, join ‘em" attitude, which I intend to do.