Brave New Storefront

Ninety percent of all applications on the Internet have yet to be invented,” according to the man who invented it in the first place. Now in his sixties, Vinton Cerf is widely acknowledged as the “Father of the Internet” based on the networking protocols he developed over 30 years ago at UCLA and the U.S. Department of Defense. These days, he’s a vice president and “chief Interent evangelist” for Google.

Cerf recently told CNN that he believes the Internet will continue to enhance people’s communication through sound, video and collaboration.

“Users will also begin using their mobile devices to control and manage other Internet-enabled appliances, [including] kitchen equipment, entertainment equipment, etc.,” Cerf told the reporter. “Your mobile [phone] might become the equivalent of a remote control device that works anywhere in the world. You might activate a high-res display and vector video/audio/imagery/maps content by a few button pushes on a mobile keyboard.”

Cerf is hardly alone in his Buck Rogers-esque convictions.

“Everything, including coffee pots, home lighting, alarm systems, autos and heart pacemakers, will have a secure IP [Internet protocol] address and be controlled by the owner,” says Howard Schmidt, a consultant for eBay and Microsoft. “RFID [radio frequency identification tags] will know when you use up the last bag of corn, add it to your e-shopping list, and transmit it to the grocery store for you the next time you go shopping or if you elect to do home delivery.”

“The next decade should see the development of a more thoughtful Internet. We’ve had the blood rush to the head, we’ve had the hangover from that blood rush; this next decade is the rethink,” says Janna Quitney Anderson, director of Internet projects and assistant professor of communications in the School of Communications at Elon University, NC. Elon worked with the Pew Internet and American Life Project last year on a study that became the book Imagining the Internet.

When will it click?

For all the crystal ball gazing, few retailers have acted on the Internet’s potential, according to Barry Diller. Speaking at the Shop.Org conference held in September, Diller said that beyond Amazon.com and eBay, most online merchants have yet to deliver a truly compelling merchandising proposition.

“Online retail has been a tough one to crack,” Diller said. While merchandising online is “vastly better” than it was just a few years ago, “[it’s] nowhere near where it needs to be.” When asked by an audience member what he envisioned a mature online retail industry to be, Diller said, “how the hell should I know?”

Described by some as an “accidental dot com mogul,” Diller was chairman and CEO of home shopping channel QVC in the early ‘90s. He now runs Match.com, AskJeeves.com and other portals.

Despite Diller’s pessimism, more shoppers are spending more money buying products online. What’s more, it is the crucial stop for many before heading into a bricks and mortar storefront to make a purchase.

“The Internet is climbing in usage and purchasing influence, magazines, TV and radio are being marginalized and newspaper influence, while still strong, appears increasingly limited to coupon offers and sale notifications,” stated the report, “Impact of Online Research on Off-Line Retail Buying: Predispositions and Outcomes.”

Conducted by the CMO Council and The ConsumerEdge Research Group, and sponsored by Yahoo!, the study surveyed consumers who had made purchases earlier this year at BestBuy, CompUSA, and Circuit City retail stores. The most popular products bought were digital cameras, computers, DVD/DVRs, printers, and TVs.

Fifty-five percent of respondents reported researching on the Web before heading off to the store. That group was almost evenly divided between those who spent less than an hour online and those who used the Internet more intensely; 27% of respondents researched for less than an hour, while 24% spent between one and three hours online and 4% spent more than three hours conducting research.

Those who stayed online longer tended to rely more heavily on banner ads, user groups, and blogs than did those who were online for less than an hour.

When respondents were asked to name their top three sources of online information, 47% chose marketers’ Web sites, 41% named search engines, and 39% picked retailers’ Web sites. Just 11% of respondents chose banner ads, while only 4% selected blogs.