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ECT News Community   »   E-Commerce Times Talkback   »   Re: Is Online Retailing Recession-Proof?



Re: Is Online Retailing Recession-Proof?
Posted by: Clare Saliba 2002-01-17 15:11:37
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Although retail revenues were down overall during the 2001 holiday season and for the year,
online retail saw double-digit growth. Does that mean online shopping is recession-proof?
Most analysts say no, and point to a number of reasons why e-tail is still growing,
although not at the exponential growth rates of seasons past. "Online retailers have
been hit every bit as hard as, if not harder than, the traditional retailers," Jupiter Media
Metrix senior analyst Ken Cassar told the E-Commerce Times.


Re: Is Online Retailing Recession-Proof?
Posted by: JimPflaum 2002-01-18 13:09:48 In reply to: Clare Saliba
It's a sad fact…e-tailing won't ever become viable until e-tailers develop entirely new marketing strategies aimed at reducing their excessively high customer acquisition cost and improving their poor customer retention performance. Once that happens, the entire e-sector will flourish.

Re: Is Online Retailing Recession-Proof?
Posted by: davidport 2002-01-17 16:23:12 In reply to: Clare Saliba
Any analyst who asserts that "slowing e-commerce growth rates are the natural result of a sector whose population is reaching the market saturation point" is wrong!

Slowing rates are due to the fact that in conventional retail, stores "store" and buyers and sellers can access that storage to efficiently exchange goods -- but in online retail, no comparable storage space exists, and since the typical means of exchange is for goods to be insecurely left outside of consumers' locked homes, most consumers won't risk ordering in the first place.

The way to solve this problem is similar to the way the US Post Office solved its own home storage/access problem many years ago -- only this time, with bigger/more functional mailbox-like devices. Such devices must enable access by all authorized vendors, must both track and notify who delivered what and when, and must also enable two-way return/pickup as well as delivery.

Since consumers aren't charged to walk into conventional stores, quickest implementation would logically occur if they weren't charged for their delivery box either. Companies financing their deployment could earn revenue from two sources: (a) sales [or delivery fees if deployed by FedEx, UPS, the USPS, etc.] which never would have been made without them; and (b) small but ongoing fees that are levied each and every time some other company accesses their box. For coincidentally, that's how revenue is made with conventional stores: (a) stores enable sales, and (b) margins are made on most all products sold through them.

Sincerely,
David Porter


Re: Is Online Retailing Recession-Proof?
Posted by: JimPflaum 2002-01-18 17:45:04 In reply to: davidport
I wholeheartedly agree with you, David; all of the Net's e-tailers need to start dealing with the home delivery security issue. You're right, it's a serious problem. Most people won't ever buy anything online until their package theft concerns are resolved. I think your idea of using bigger, more secure mailbox-like devices has merit, something that you might consider running by Shop.org, the Net's e-tail sector trade association.

Re: Is Online Retailing Recession-Proof?
Posted by: davidport 2002-01-19 09:42:12 In reply to: JimPflaum
Thanks very much for your agreement, Admark. Unfortunately, even though I've written to Shop.org's Elaine Rubin and Scott Silverman multiple times, they haven't yet responded. I've also tried contacting many of the analysts that are routinely quoted by E-Commerce Times writers; but haven't had much luck with them either. ...Can I ask a favor? Since I think I've compiled some pretty compelling rationale for deploying such boxes, if you have a pipeline to any of these folks, would you mind asking them to review the info found on my Web site at www.fastlaundry.com ?

Thanks again,
David


Re: Is Online Retailing Recession-Proof?
Posted by: JimPflaum 2002-01-21 17:46:53 In reply to: davidport
I exchanged email notes with Elaine Rubin a few years back, but I don't really know her well enough to help you out. If I were you, David, I'd just give Elaine a call and see if you can set up an appointment with either her and/or with one of Shop.Org's committee chairpersons, all of whom work as brick-and-click executives or operate pure-play retail stores. It's certainly worth a try.

Again, I think your "secure delivery box" idea has lots of merit. Like you, I'm convinced that the public won't ever embrace the online shopping process until the Net's leaders initiate safeguards to reduce the public's concerns about credit card fraud, privacy intrusion and package theft. I've researched the security issue inside and out, and there's no doubt in my mind that the industry has totally underestimated the impact that these unresolved security issues have had in terms of driving up the retail sector's customer acquisition cost. I'm also convinced that the Dot.com crash never would've happened if the Net's leaders would've dealt with these security issues back during the Net's early days.

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