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Is the Horse Dead Yet?
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S This
article is for anyone who has had trouble demonstrating to a merchant, or
anyone else for that matter, that brick and mortar merchants must
have a Web presence to be successful. How
Do You Measure Success? Even
if a Web store’s sales aren’t stellar, it doesn’t mean the Internet
is not filling a need for that merchant’s customers. According to a
Georgia Tech survey, 74% of Internet users use the Web for research. For
example, customers may log on to a local store’s Web site, verify
product information or pricing, and then visit the traditional store to
see, feel, and finally purchase the item. In this case, the Internet is a
true value to that merchant, even though that sale was not processed
through the Web site. The
value of an Internet presence increases tenfold when the customer is not
familiar with the merchant until he conducts the online research. In this
case, the Internet has introduced the merchant to the customer and
attracted him to the retail location. In this instance, the Web store may
be considered advertising. Speaking
of Advertising Advertising—many
merchants spend hundreds, sometimes thousands of dollars on radio,
newspaper, and television advertising each month. In fact, this
advertising might be using funds the merchant could be budgeting toward
designing and maintaining an Internet storefront. If
these merchants knew that a recent study conducted by the Stanford
Institute for the Quantitative Study of Society (SIQSS), found that 59% of
regular Internet users (online more than five hours per week) say the
Internet has reduced the time they spend watching TV and 34% are reading
the newspaper less, they may reconsider moving their advertising dollars
toward their Web stores. Shopping
V. Buying Shopping and purchasing are two different actions and no place is this more evident
than online. In the traditional world, when we go to the grocery store we
say, “We are going shopping.” We know that we will go to the location,
chose our items, and purchase them. There is almost no doubt we will be
purchasing items so, a better word choice might be, “We are going
buying.” When
we log on to a Web site, many times we are just shopping. We are looking
at the different choices, comparing prices, and checking out the latest
fads or fashions. We may or may not purchase. And, as stated earlier, if
we do purchase, it may or may not be online. Therefore,
a merchant must decide if he wants his store to be an online shopping
destination, an online purchasing destination, or both. This is important
because shoppers and buyers look for different features in a site. A shopper
is looking for product information, detailed descriptions, comparisons to
similar products, warranty information, and maybe even reviews or
endorsements. On the other hand, a buyer usually knows what he wants and
is looking for a site to offer a competitive price coupled with the
delivery and payment methods he prefers. What’s
Available Online? Merchants
with moderately priced items make up most of the online market. The
Urban Land Institute reports that 83% of the online market is made up of
Web sites that offer products retailing for between $10 and $100. Pricier
items, those costing between $100 and $999, account for 13%. Sites that
sell products costing $1,000 or greater make up only 4% of the market.
This is a chicken/egg scenario. Are lower priced items online because that
is what is selling or are consumers buying them because that’s all
that’s available? Merchants offering items greater than $100 may be able
to capitalize on this opportunity. If
you take nothing away from this article and still believe that the
Internet is not vital to businesses, remember this: according to Forrester
Research, in 1994 5.8 million households had Internet access. In 1999 it
was up to 38.8 million, or one third of the population. According to the
Stanford Institute for the Quantitative Study of Society as of February
approximately half of the population has access, 38 percent in their home
and another 17 percent elsewhere, such as school or work. If that doesn’t sound like much to you, consider this: It took the PC itself 13 years to reach 30% of the population. TV took 17 years, and the telephone took 38 years, but the Internet reached 30% of our population in just seven years. Most Americans can’t begin to imagine life without TV, a PC, and especially a phone. Many Americans have made their livings based on these technologies, some of them quite comfortably. Why should the Internet be any different?
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1995-2000 |
