Chip Shots by Chip Griffin

Assuming Fatigue Not in Evidence Weakens NY Times Story on Internet Retailing

image The Sunday New York Times splashed a page 1, above the fold story on painting a picture of gloom and doom in online retailing (“Some Buyers Grow Web-Weary, And Online Sales Lose Steam”).  A chart even accompanies the sensational headline.  The first sentence is particularly inflammatory: “Has online retailing entered the Dot Calm era?”

Paul Kedrosky does a nice job of rebutting the underlying argument of the story by pointing out that growth rates must necessarily slow, lest brick and mortar sales cease altogether.  No industry can sustain astronomical growth rates forever.

In fact, the authors of this piece admit this fact:

The slowdown is a result of several forces. Sales on the Internet are expected to reach $116 billion this year, or 5 percent of all retail sales, making it harder to maintain the same high growth rates. At the same time, consumers seem to be experiencing Internet fatigue and are changing their buying habits.

Paul hit on that first point, but I want to drill in to the bit about “Internet fatigue” and “changing their buying habits.”  But first, here’s what he writes:

it’s no surprise sales is slowing. The law of large numbers still holds — always has, alway will. But the raw revenue numbers are still gigantic, with online commerce adding more incremental revenue this year than was the entire e-commerce market in 1998-1999.

Does it have anything to do, however, with people balking at buying online? You have got to be kidding.

Precisely.  Where’s the support for this claim?  Surely somewhere in the article there must have been some survey results that suggest people are “tired” of using the Internet to make purchases, right?  Not a chance.  So perhaps there are some anecdotes about people who used to like shopping online but don’t anymore, right?  Not a chance.

In a courtroom, it would be called “assuming facts not in evidence.”  Here, we’re just talking bad journalism.  There are several quotes in the story from people who don’t like to shop online, but no evidence that this is a change in behavior for those individuals.  Therefore they aren’t “fatigued” or “changing their habits.” 

The closest this story comes to trying to prove this sensational claim is in the following paragraph:

The reaction to the trend is apparent at Dell, which many had regarded as having mastered the science of selling computers online, but is now putting its PCs in Wal-Mart stores. Expedia has almost tripled the number of travel ticketing kiosks it puts in hotel lobbies and other places that attract tourists.

Yet neither of these examples demonstrates either fatigue or changing habits.  Rather it shows online retailers seeking new markets not following shifting customers. 

It’s unfortunate that the New York Times decided to take a tabloid approach to this issue.  One expects more from the paper, especially for a page one play.

AUTHOR’S NOTE: I read this story in the City Edition of the paper yesterday, as I am in New York for business.  In seeking out the image of page one of the Sunday NYT to include in this post, I noted that it was not included on page one of the national edition.  In addition, the online edition today lacks the inflammatory start of the headline (“Some Buyers Grow Web-Weary”) and opts for the more sedate second half (“Online Sales Lose Steam”).  I wonder if the paper’s own editors shared my concerns, at least to a degree?

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2 Comments

  1. You could not be more right. Are we supposed to believe that customers are deciding that it is better to get in their car and fight traffic at $3/gallon for gas rather than buy online?
    The multi-channel trend is a problem or opportunity depending on how you look at it, but e-tailing is here to stay (at least for a long time).

  2. You could not be more right. Are we supposed to believe that customers are deciding that it is better to get in their car and fight traffic at $3/gallon for gas rather than buy online?
    The multi-channel trend is a problem or opportunity depending on how you look at it, but e-tailing is here to stay (at least for a long time).

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