Mcpete Sez,        The Lingerie Newsletter                             &            Women's Wear Journal.                  Retailers Beware - It Lives,            the Internet Evolution  The hype surrounding Internet shopping has died and with it so have hundreds of Internet retailing dreams and schemes. Company after company, including traditional bricks and mortar retailers and mall developers, have written off millions of dollars in failed attempts to mine the riches of the Internet Promised Land. Two weeks ago Federated Department Stores announced that bloomingdales.com was being shut down - obviously the site wasn't paying its way. Earlier this year Chicago-based, mall developer General Growth Properties wrote off some $60 + million after the shutdown of their Internet services venture. Even Amazon.com has come to terms with the reality of the fact that it is not going to become the Wal-Mart of the Internet. Those bricks and mortar companies who weren't caught up in the frenzy are feeling pretty smug right now - it seems that the Internet Revolution just sort of went away.    But the "Internet revolution" obituary may have to be re-written, slightly, eventually. Perhaps revolution isn't the correct label. The right classification should be evolution. That's right, another "E" word. But as John S. McCright, Department Editor of eWeek News & Views, a weekly email newsletter focusing on E- business, wrote in his column of December 19, 2001, "the replacement of traditional mall and catalog shopping by online shopping will be evolutionary, not revolutionary."  Recent research would suggest that this is true. This week Forrester Research, the Cambridge, MA-based "emerging-technology research firm", released the results of a November survey. The company found that "total US spending on online sales increased from $3.6 billion in October to $4.9 billion in November." Yes, a small sum when compared to the hundreds of billions of dollars spent in traditional stores during that period but an indicator of an evolutionary trend. Forrester also found that households shopping online increased to 16.8 million in November vs 13.7 million in October while average per person online spending increased to $293 per person from $265 in October.  "While zero-percent financing deals got people to shop offline in October, people shifted their attention to purchasing holiday gifts in November," said Christopher Kelley, an analyst at Forrester. "In doing so, they went online to seek out the best deals they could in an attempt to stretch their dollars as far as possible."  The anecdotal evidence supports these observations. A large segment of the population is quietly and unquestionably becoming multichannel shoppers. Consider Scottsdale, AZ resident Susan F., a forty-something year old mother of three who doesn't fit the typical Internet shopper profile.  Susan loves to shop. In fact, she is almost as familiar with the Scottsdale Fashion Square mall as she is with her own backyard. Last month in a quest for a new pair of sunglasses, Susan walked the mall from end to end, eventually finding the right pair. Did she buy them there? No. The in-store price deterred her. But taking a page from her 18-year-old son's playbook, she went home, went online, did some price comparisons, and found them at a discount e-tailer website at a 40+% savings. The benefit of price over convenience caused another traditional shopper to evolve into a multichannel shopper.  Sales are also finding their way online through more indirect means as well. Irene S. of W. Bloomfield Hills, MI has almost 8 decades of shopping experience. Her destination of choice is the Somerset Collection mall in Troy, MI. On a crisp November afternoon, Irene and her sister shopped the afternoon away stopping at the Nordstrom café for a late afternoon cappuccino. Comparing notes on several perfumes they sampled, Irene decided she really liked a perfume called Alfred Sung. However, she didn't make her purchase there where the price tag was $68.00.   That evening she phoned her daughter in Dallas, who in turned "comparison-shopped" online and made the purchase for her at PerfumeBay.com where it was purchased for $27.90 plus $4.50 shipping and handling. The perfume arrived at Irene's home two business days later accompanied by an array of samples. While still a bricks and mortar perfume shopper, Irene is now an online perfume buyer.  For these new multichannel shoppers the process is inverted from the currently more predominant "research online, buy in the stores" process. For them, the malls serve as bricks and mortar showrooms that help them in making the decision that will eventually lead to discounted online purchases. Others are simply becoming more comfortable with online shopping when compared to the aggravation of bricks and mortar shopping particularly during the busy holiday season. As eWeek's Mr. McCright wrote, "I'm not a big online shopper. I buy the occasional book or CD online. But the hassles of shopping at terrestrial stores drove me online this holiday season. I now understand why the replacement of traditional mall and catalog shopping by online shopping will be evolutionary, not revolutionary." He went on to state, "It was like having 200 malls to visit."  That there is a slow but steady trend here is undeniable. This past week's Jupiter Media Metrix Online Shopping Index (the index aggregates Web visitors from both home and work to nearly 500 shopping sites) shows online shopping traffic increased 55%, counting 52.3 million unique visitors vs 33.8 million a year ago. Jared Blank, Jupiter Research analyst observes, "The late-season momentum of this year's online holiday traffic suggests that this year's sales expectations are likely to be exceeded."  More and more Americans are slowing but surely getting comfortable going online, at first to research products for an offline purchase but eventually many are beginning to see some benefits to online shopping. Whether the benefits are convenience or price, the consumer population is slowly evolving, finding a sort of comfort zone with multichannel shopping that embraces all the various shopping tendencies and needs. The inevitable result will be bricks and mortar sales erosion.  The question is, as this E-Volution quietly continues, where will that comfort zone be for retailers and the malls that house them?                                        www.mcpetesez.com