When it comes to Christmas shopping online, 1999 was seen by many as the year when etailers and consumers alike tentatively dipped their toes in the water. The good news is that this year should be better than last year. The bad news is that that's no great achievement.

Christmas shopping over the Web was a novelty exercise. No one actually relied on it. did they? After all, only a handful etailers got it right in Australia, and even less in the US, according to APT Strategies e-business principal consultant Tony Rosenberg. Indeed, some local reports released earlier this year claimed that as many as one-fifth of Christmas presents ordered online by Australians in 1999 were delivered either after the big day or not at all.

The scary thing, says Rosenberg, is that those who let the industry down last year have not necessarily gone anywhere. Their money hasn't run out. Not quite. They can still hang on for another silly season, or part thereof. For those, Christmas 2000 could well be the lifeline they've been holding out for. Maybe this time they'll see a stronger consumer interest that spirals upward into higher revenues, better fulfillment capability, stronger customer interest... After all, business-to-consumer (B2C) e-commerce in Australia for Christmas 2000 is tipped to triple in fiscal volume from last year. And Christmas is expected to account for up to 40 percent of annual revenues for Australia's etailers.

But what if, for some reason, the numbers in some etailers' books just don't match up and they find they just can't afford to see this silly season through? Well, says Rosenberg, it's simple: No delivery, no presents, money quietly refunded sometime in early 2001, shortly after those less-than-capable players have called it quits mid-game. Too cynical? Think again.

In 2000, says Rosenberg, there is every chance this will happen. It happened last year, didn't it? Australian Consumers' Association policy officer for IT and communications, Charles Britton, agrees that the defining factor of e-Christmas 2000 will be the start of the inevitable etail market shakeout - fewer weaker players resulting in more business for the stronger players. Britton remains mostly positive about the consumer effects of this consolidation. He expects the stronger etail players will have learnt from their - and others' - mistakes made last Christmas. At the same time, the weaker players - those who didn't pay enough attention to timely and accurate delivery last year - should start to drop off.

Unfortunately, however, Britton warns that 2000 is probably too early in the piece to see any real clear division between the cans and the can'ts. As far as he's concerned, it might just take this festive season to push the losers past breaking point - the result of which everyone benefits from in the long term, except the losers themselves. Some "financially lean" players will inevitably "fall off the twig" at the eleventh hour abandoning gift orders already in place, but c'est la vie, says Britton, that's what consolidation is all about.

Rosenberg believes the players most likely to withstand the Christmas 2000 test are those that have taken active steps to partner with the fulfillment side of town. He cites dstore and wishlist.com.au as examples of this. This year dstore partnered with fulfillment company 3PP to hatch joint venture e-fill, while wishlist formed an alliance with service station franchise BP, which even took a 25 percent stake in the company. For those still keen on outsourcing deliveries, Australia Post will be the champion, Rosenberg says.

So what will we will be buying, if anything?

Books, CDs, hampers, sporting equipment and thoughtless corporate gifts will dominate the online spending spree this year, says Rosenberg. Pretty much what you'd expect. And pretty much what the more astute etailers have been busy lining their catalogues with. For this reason, he defends the tactics taken by the likes of offline retail giant David Jones, which will try its hand at Christmas etailing for the second time this year. Some laughed when DJs launched a Web site in late 1999 that offered little more than a selection of hampers, but now, with a few carefully-chosen additions, Rosenberg reckons DJs has this time catered exactly to those who will be buying online: the wealthy, the Net-savvy, and the "time-poor".

"David Jones came online with very little strategy. But now the product range is very well suited to those people," he says.

However, Rosenberg says there are some product types that simply aren't going to move units online. What's not hot on the Web, he says, is clothing. Australians just won't get into buying clothes over the Web, not for a long time. He cites the familiar "look and feel" argument as the reason. Americans may get into catalogue shopping, even when it comes to clothes, but Australians still like to try stuff on and feel the fabric in their fingers and look in the mirror and imagine what it would look like with different shoes. That's kinda hard to do, even with a Pentium III.

"There's a limited space for online shopping," he says. "There's no way that online will be bigger than bricks-and-mortar." No one could agree with this sentiment less than Milton Burrell, CIO of outdoor clothing chain Colorado. Colorado launched its etail site in mid-October, only to find that some items - watches, sunglasses, towels - were selling three times as many units online as they were offline within three weeks. Sure, these are the items you don't have to try on, but even the company's anticipated "toughest" online sell, footwear, was selling around one-third as many units online as off in the same time, Burrell says.

Burrell agrees that clothing has not exactly been the hot favourite of Australian etail thus far, but he doesn't attribute this to any kind of national fixation on "look and feel". Maybe, he suggests, the finger's being pointed in the wrong direction. Maybe it's as simple as the fact that "no-one's doing it well in Australia."

Australians still reluctant to shop online

It's probably true that the whole "look and feel" thing is a swaying factor, but that's not what's holding Australia back on the whole, say Rosenberg and Britton. The real inhibitor to widespread consumer take-up of online shopping, they say, is the same one that's been haunting the local etail industry all along: fear. Fear of security, fear of poor fulfillment. One is reasonable, the other isn't, both experts say. They say the truth about Internet security is that while there are hackers out there who can get what they want - certainly your credit card details, and more - they are fewer, and a whole lot smarter, than the commonplace thieves who take off with credit card details submitted far away from the Web every day.

Indeed, government agency the National Office for the Internet Economy (NOIE) agrees consumer fears of credit card fraud over the Net are over the top. NOIE cites industry research figures that show more than half the nation's population are hesitant to pay for anything online due to security fears. Meanwhile, the agency says, less than two percent of transactions conducted over the Web have ever resulted in any kind of security breach. Relative to the risks consumers face every day in the offline world, security is more of a deterrent to online shopping than it really ought to be.

"It's a mindset we have to change," says Rosenberg, offering up the scandal-hungry local media as one reason for such an inflamed collective fear of Web security. Fear of poor fulfillment? Well, the experts say, this is absolutely reasonable. Eighty percent may sound impressive for a first-year uni student, but this is the real world. Full marks or bust. The smart etailers, and the ones with enough moolah, have taken the right steps to get as close as possible to the full hundred.

As for the rest, and those that make the easy mistake of doing business with them this Christmas. Well, there's always 2001.

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