From Boom to Bust to Bean Counting: Online Retailing Grows Up in 2000 -
Jan.2001
They were everywhere during last year’s holiday season. E-tailers, the
brazen youngsters of retail, had what seemed like unlimited cash flow from
investors drunk on the nectars of the booming economy. The result was
advertisements on television and top magazines, incentives like free overnight
shipping and a pioneer’s spirit of boundless possibility.
A year later, though consumers’ acceptance of online retailing has soared
and sales are booming, the climate at e-tailers is one much changed since
1999.
Total Internet holiday spending touched $8.7 billion, up 108 percent from
the $4.2 billion shoppers spent on the Web in 1999, reported a study by Goldman
Sachs, which tracked spending from the first week of November to Dec. 17.
In the jewelry industry, the online sector—largely undefined during last
year’s holiday—evolved into a narrow one led primarily by
clicks-and-mortar companies. As predicted last year by analysts like Jupiter
Communications, established retailers like Tiffany and Zale matured into
the most successful venues for fine jewelry.
Of the pure play e-tailers, the field narrowed for the large group in 1999
as Miadora and Adornis closed shop, leaving sites like Ashford.com.
While still suffering losses, Ashford, like other online e-tailers, is no
longer a cash cow and focused on profitability and customer service, according
to CEO Kenny Kurtzman.
