Perspectives on electronic retailing have changed dramatically over the past seven years. In 1998, most analysts predicted that a new breed of high-tech, web-savvy entrepreneurs would dominate the retail industry. Everyone would shop over the Internet, stores would close owing to lack of traffic, and paper catalogs would become obsolete. The prospects for electronic retailing were so bright that companies invested, and lost, billions of dollars in Internet retail entrepreneurial ventures such as Webvan, eToys, and Garden.com – companies that are no longer on the retail landscape.
Even though online retail sales continue to grow much faster than retail sales through stores and catalogs, we now realize the Internet is not a revolutionary new format replacing stores and catalogs. Although the Internet continues to provide opportunities for entrepreneurs, in the retail industry it is primarily used by traditional retailers as a tool, complementing their store and catalog offerings, for growing revenues and providing greater value for their customers. For the majority of retailing activity, the Internet is a facilitating rather than a transformational technology (Weitz 2001).