An April 1998 report by the U.S.Department of Commerce called The Emerging Digital Economy revealed that 10 million people in the U.S.and Canada had used the Internet to make a purchase in 1997.A recent Ernst and Young study finds that 64% of Internet users research products online first and then buy them at stores or over the phone.The Commerce Department report also finds that 40% of the transactions made with retailers on America Online are made during the hours when traditional malls are closed.Consumers said that convenience was the primary reason why they made purchases over the Internet, with ease of research and good prices ranking a distant second and third, respectively, the report notes.

The commerce report also quotes a J.D.Powers study that says that in 1996, 10% of all new car buyers used the Internet as part of their purchase process and that by the year 2000, fully 21% will use the Internet to purchase a car.This report estimates that dealers with Web sites currently sell an average of 5 cars per month over the Internet.Therefore, buyers can shop the virtual showroom and then head for a final test drive at the dealership.For car dealers, some difficult decisions loom as the need for a great location and a grandiose storefront diminishes.