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| CYBER SHOPPING | |
 December 25, 1998 
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Following this background report from Lee Hochberg of Oregon Public Television, Margaret Warner leads a discussion on shopping on the Internet.
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LEE HOCHBERG: It's a December unlike any other in the Portland warehouse of Camera World. A 20-year-old company, with just one store and a catalogue business, it began selling its cameras and electronics over the Internet nine months ago. CEO Alessandro Mina says the response has been overwhelming. |
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| "It's just growing, almost beyond control." | ||||||||||||||
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LEE HOCHBERG: Ten times the number of orders you would have gotten before the Web? ALESSANDRO MINA: Right. Exactly.
ALESSANDRO MINA: It's a new phenomenon that we're having a hard time understanding, but it's just growing, almost beyond control. LEE HOCHBERG: Nationwide, online commerce has exploded. Web sales
are expected to top $5 billion the year. One in four Internet users
makes purchases online from department store chains such as Macy's
and Nordstrom, from book and
music and specialty stores. Industry experts say holiday Web purchases
have doubled over last season -- millions of consumers, skipping traffic
jams, to point, click, and be done with shopping. Concerns about security
of payment are fading with 2,000 online sites now caring this Better
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| A threat to traditional businesses. | ||||||||||||||
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For traditional businesses built of brick and mortar, online commerce has created problems. Powell's Book Store, a longstanding Portland business, has seen its new book sales drop precipitously as many shoppers turn to the Web sites of Amazon.com and Barnes & Noble.
LEE HOCHBERG: Powell's has stayed profitable by emphasizing its inventory of used books, even starting its own used book Web site. But e-commerce could be one more nail in the coffin of smaller bookstores, already struggling to compete with bookstore chains. Not everybody is jumping into the virtual marketplace. Some popular brands like Ralph Lauren and Burton Snow Boards have resisted it for fear of cheapening their brand imagery. Portland based Columbia sportswear says selling off the Web would under undercut its retail distributors and the costly.
LEE HOCHBERG: Marketing Director Dan Hanson says e-commerce, while convenient, doesn't satisfy some consumer needs. DAN HANSON: I think it's going to grow wildly, but there will always be a need for the retailer out there who can - who can service of person's needs and put a piece of outerwear on their back.
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| E-commerce and the impact on local tax revenues. | ||||||||||||||
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These advancements in technology and marketing have political leaders uneasy. In Vancouver, Washington, one of the country's fastest-growing towns, city fathers say virtual sites are replacing real stores.
LEE HOCHBERG: City lobbyist Mark Brown says virtual stores have an unfair competitive advantage over traditional ones, which have to charge tax on every sale. Congress passed a three-year moratorium on sales tax for online businesses, a provision Brown says harm cities like Vancouver.
LEE HOCHBERG: Brown says Vancouver city government already is losing a million dollars year in tax revenues. Numbers like that could grow, though, as America embraces easy stay-at-home shopping. |
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ALESSANDRO
MINA, President, Camera World: Since this morning we've had 200 - just
shy of 200 orders coming in right here, which is about 10 times what
one of our salespeople would have taken on the phone. 
LEE
HOCHBERG: Camera World had taken 20 years to build its annual sales
up to $80 million. In the one year since starting a Web site it's added
20 million additional dollars in sales, solely off the Web. That's a
quarter of its total business. 
Business
Bureau seal of approval and so-called secure servers scrambling credit
card information as it's sent over the Web. Though a recent study from
new media research firm Jupiter Communications found 42 percent of top
Web sites took six days or longer to respond to customer inquiries,
last-minute shoppers are descending on the Web, one site even counting
down the seconds that remain until Christmas.
KANTH
GOLPALPUR, Powell's Books: And the convenience factor is incredible.
They offer a lot more contact and ease of ordering and I think that's
going to make it incredibly difficult for any independent bookstore
to survive 
DAN
HANSON, Columbia Sportswear: It's very new. We're skeptical that it
is going to continue to grow and become what you describe - the one,
"the end all/be all" for retail. 
LEE
HOCHBERG: And, yet, Internet geniuses have an answer to that too: New
body scanners under development that will send the body measurements
to a Web site so computer users can virtually try clothes on. 
MARK
BROWN: It is driving business away from main streets in every city in
this country and into these electronic commerce venues, and, again,
it's just extremely unfair. 
MARK
BROWN: We have a lot of vacant retail businesses in our downtown core.
The last thing we need is a significant additional unfair competitive
advantage for those who will locate somewhere else in another state
and perhaps even in another state across the country.