Retail e-commerce sales expanded 15 percent in the U.S in 2012—seven times as fast as traditional retail.

"Why do some stores succeed while others fail? Retailers constantly struggle with this question, battling one another in ways that change with each generation. In the late 1800s, architects ruled. Successful merchants like Marshall Field created palaces of commerce that were so gorgeous shoppers rushed to come inside. In the early 1900s, mail order became the “killer app,” with Sears Roebuck leading the way. Toward the end of the 20th century, ultra-efficient suburban discounters like Target and Walmart conquered all.

"Now the tussles are fiercest in online retailing, where it’s hard to tell if anyone is winning. Retailers as big as Walmart and as small as Tweezerman.com all maintain their own websites, catering to an explosion of customer demand. Retail e-commerce sales expanded 15 percent in the U.S in 2012—seven times as fast as traditional retail. But price competition is relentless, and profit margins are thin to nonexistent. It’s easy to regard this $186 billion market as a poisoned prize: too big to ignore, too treacherous to pursue.

"Even the most successful online retailer, Amazon.com, has a business model that leaves many people scratching their heads. Amazon is on track to ring up $75 billion in worldwide sales this year. Yet it often operates in the red; last quarter, Amazon posted a $41 million loss. Amazon’s founder and chief executive officer, Jeff Bezos, is indifferent to short-term earnings, having once quipped that when the company achieved profitability for a brief stretch in 1995, “'t was probably a mistake' " (http://www.technologyreview.com/news/520801/no-stores-no-salesmen-no-profit-no-problem-for-amazon/ accessed 11-07-2013).