Americans are growing increasingly eager to spend money on the internet.
   What they are not eager to do is spend this money with internet-only online retailers, much to the chagrin if not outright ruin of many a web-based company.
   When it comes to shopping online, consumers are putting their trust in traditional brick-and-mortar retailers with online subsidiaries.
   A new study from the Boston Consulting Group predicts that online revenue will skyrocket over the next four years. At the same time, the study concludes that it will by and large be existing, offline companies that will benefit from the increase.
    "Online offerings from pure-play startups only rarely out-compete brick-and-mortar retailers," the study states.
   The death of many if not most pure-plays, however, should not be equated with the death of the internet as a commerce channel.
    The study projects that spending in nine major online retail categories will grow by nearly 400 percent between 2000 and 2005—from $34 billion last year to $168.4 billion four years from now.
   This would make the internet the fastest growing retail channel in the history of retailing, say the study’s authors.
    Of course many entrepreneurs early on suspected the internet’s potential as a place of commerce. The mistake they made was in presuming that this new channel by necessity would be dominated by new companies.
   This will not turn out to be the case, says the Boston Consulting Group.
    Contrary to the beliefs espoused by internet commerce pioneers and the venture capitalists who backed them, the study says the advantages offered by the internet to retailers are not themselves sufficient to make for successful businesses.
    These advantages include unlimited hours of operation, comprehensive product information and low-cost communication.
   Such things are relatively meaningless, however, if not accompanied by functioning logistics systems, proven profit models and recognizable brands offering clearly perceived benefits.
   For a crazed few years there, such obvious requirements were thought to be secondary to simply getting online.
   "Moving first is not a substitute for strategy," the study notes.
    While online demand to date has been dominated by discretionary purchases, growth in the coming years will be led largely by those categories that have yet to make much headway online—the "necessity" categories of groceries, clothing and health and beauty (see chart).
   Leisure travel is one discretionary category the study says will continue to grow significantly.
   But these necessities will lead simply because of how large they are as spending categories, not because many people are actually going to buy such things online in the coming years. The study claims that the overall percentage of such purchases occurring online will remain quite low.
   In fact, clothing, groceries and health/beauty are the three online categories people say they are least likely to shift spending to by 2005.