In 1986, then-chairman of General Motors Roger Smith said, “By the turn of this century, we will live in a paperless society.” I don’t know about you, but I’m awash in more paper than ever. In a 1995 article in InfoWorld, someone named Bob Metcalfe predicted that the Internet would “go spectacularly supernova and in 1996 catastrophically collapse.” Well, we’re still waiting….
The September-October 2000 issue of The Futurist magazine cites these predictions, and many more, in an article about erroneous forecasts. Now I’m going to risk making a bad prediction of my own, by stating that I believe current doomsday forecasts about pure-play retailers are erroneous as well.
In recent months, both GartnerGroup and Forrester Research issued much-quoted forecasts stating that by the end of 2002, as many as 90% of the online-only marketers operating today will be extinct.
But don’t start singing “Ding, dong, the witch is dead” just yet.
For one thing, in many (if not most) business segments, the overwhelming majority of start-ups fail within several years. Each time I visit the neighborhoods in New York where I lived in the early and mid ’90s, for instance, I’m stunned by how few of the restaurants, bars, and stores I frequented remain.
For another, those pure-plays that do survive the dot-com shakeout – and yes, I’m not fool enough to deny that we’re undergoing a market correction in terms of the sheer volume of merchants online – will be formidable competitors. They’ll be conglomerates made bigger and stronger from swallowing up smaller businesses. Or they and their brands will be firmly established within their niche.
Nonetheless, even if “only” 50% of the existing pure-plays fade away during the next two years, that still thins the field significantly. It also frees up venture capital for businesses with more pragmatic business plans – such as multichannel marketers.
I won’t forecast precisely which percentage of pure-plays will be around in two years’ time. After all, if I were good at that sort of thing, I’d be the one in our household who manages the stock portfolio. But here is my prediction: Within a year we’ll see reports that the death of the dot-coms was greatly exaggerated.
And if I’m wrong, at least I’ll be in good company: In 1939 The New York Times predicted that television would never catch on because “the average American family hasn’t time for it.”