Online retailing has undergone a major transformation especially in Europe and US. Many pure-play e-tailors have gone down and the investment community has turned cautious. At the same time traditional retailers have seen potential benefits of online trading.

Many traditional retailer and consumer products companies expanded in 2001 their merchandise assortments online to cater to customers spending more on a wider range of products. Clearly, companies recognised that online retailing is no longer an option but a must.

Consumers today are very satisfied with online retailing. They continue to buy online in increasing numbers and spend more on a greater range of merchandise categories. However customers are generally price-sensitive. They are concerned with shipping costs, which also rank as number-one factor discouraging online buying. Most of companies still charge for delivery, and about 10% are using delivery as a profit centre, too.

More people are buying online than ever. Consumers are making more online purchases and increasing their spending. Books, CDs and computer equipment are still the best sellers. But new trends are apparel and health and beauty products.

Store traffic is being affected by e tailing. E-shoppers are visiting stores less often because of online shopping. Also the demographic profile of the online shoppers has begun to resemble traditional consumer. Males dominate outside the U.S., but women now represent almost 60% of online shoppers in the U.S. and almost 50% in Australia and Canada.

The majority of customers expect to find lower prices online. Majority of companies worldwide have different pricing structures for their online and off-line operations.

To fully realise the great potential of online retailing, companies must offer an exceptional customer experience. Customers have high expectations and their loyalty is very conditional. Success will depend on how well companies are able to meet or exceed customer's expectations.

Companies need a multi-channel strategy that integrates their online and off-line operations. Operations excellence is critical, having the technology and delivery systems that work beyond customer's expectations. Excellent merchandising is also needed to provide consistent assortments and service in all channels.

Companies must adapt quickly to consumers' demands, technology developments and rapidly changing business requirements.

In the next few years, companies who really understand, what is need to be successful online, will outdistance the competition. Consumers will go to sites they know and trust. Online retailing will be substantial and particularly apparel accessories and toys will represent about 10 % of sales. Books, music, software, videos, and consumer electronics could represent as much as 20 % or even more of online sales.

Experienced online shoppers have already proven that the convenience of online shopping outweighs its shortcomings. They will buy virtually any product through this channel. Five years from now, online retailing will be nothing like it is now. Its promise seems assured.