ECOMMERCE HOT SPOTS
Many Internet moons ago, Jeff Bezos and two flacks sat at a table in the Wired offices and made a case for their Web start-up, soon to "carry" more titles than any bookstore in the world. That meeting has remained memorable not only because of Amazon.com's performance, but because Bezos broke a sweat insisting that the Web was suitable for any number of retail categories. He'd made lists! To finish the point, he declared that if he'd figured a better way to sell diapers on the Web, he might have gone that route.
He settled on books instead of diapers, however, because the Web was best suited for retail categories that (1) had a large number of SKUs (aka stock-keeping units – translation: huge selection), (2) required only modest graphical representation (so a thumbnail of the product would load onscreen quickly), and (3) cost significantly more than the price of shipping (otherwise, why bother?).
These days, Bezos isn't taking any time out to expound on his favorite categories – he's too busy moving on them. But why should Bezos have all the fun? Here's a look at the consumer categories that have really taken off – and a few to grow on.
| Category| Top Dog(s)| Margin Notes
Bezos's Top Picks, Circa 1996
| PC hardware | Dell | Still the poster boy for mass customization.
| Software | Beyond.com | Saw 300 percent growth in 1998.
| Books | Amazon.com | The Mario Andretti of online retailing.
| Music | CDnow | Merged with N2K to take top spot.
| Videos | Reel.com | Has sold more than 300,000 copies of Titanic.
| Five Bezos Missed
| Air travel | Preview, Expedia, Travelocity, priceline.com | Convenient for the airlines, too: fewer empty seats.
| Auctions | eBay, OnSale | The IPO run-up may not last, but eBay's earnings will.
| Cars | autobytel.com, Autoweb.com, Carpoint | Digital-age lead generators give rise to the know-it-all car buyer.
| Flowers, gifts, greetings | 1-800-Flowers | Along with FedEx, 1-800-Flowers remains the poster kid for just-in-time delivery.
| Financial services (investing) | Schwab, E*Trade | As many as 96 online brokerages now crowd this market.
| Five to Watch in 1999
| Financial services (lending) | E-Loan, HomeShark | More contingent on interest rates than anything else, of course, but a Net natural.
| Events ticketing | Ticketmaster | See "Boffo Box Office".
| Apparel | L. L. Bean, J. Crew, Gap | Not that apparel isn't huge already, but expect it to really hit home this year.
| Dietary supplements | GreenTree, Mother Nature, VitaSave | Expected to reach $70 million by year's end.
| Insurance | InsWeb, Quicken's InsureMarket, E-Insure Services | Think of something you'd want to spend less time doing.
Sources: Amazon.com, Jupiter Communications, Forrester Research, BancBoston Robertson Stephens
| MUST READ
| Burn Rate Olympics: 1998’s IPOs
| Who Will Rock 1999
| Joysticking It to the Academy
| Inside the First “Internet War”
| People
| The California Spammer Hammer
| Raw Data
