By Lori Enos E-Commerce Times
08/20/01 10:28 AM PT
Jupiter said that Internet pure plays should focus on recognizing profits from
their Web sites, while brick-and-clicks can count on other benefits.
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By only looking at top-line metrics such as sales and profits, 69 percent of
brick-and-click retailers are underestimating the benefits derived from
their Web sites, according to a report released Monday by
Jupiter Media Metrix.
The report concluded that brick-and-click retailers who factor
in non-transactional benefits, such as online-influenced sales
and improved payroll productivity, will find that the return
on investment (ROI) of their Web sites is 65 percent higher
than if they only consider online sales.
"Brick-and-mortar retailers should not blindly follow the
lead of their pure-play competitors by adopting a laser-like
focus on the profitability of their Web sites," Jupiter Media
Metrix senior analyst Ken Cassar said.
"A typical brick-and-mortar retailer's Web site can yield
financial benefits well beyond the transactions it generates," Cassar added.
"Jupiter estimates that nearly two thirds of the total Web benefit
for retailers will be in offline transactions influenced by online research."
Channel Plus
In the report, "Profits Are for Pure Plays: Prudent Online
Investment Strategies for Brick-and-Mortar Retailers," Jupiter
said that only Internet pure plays should focus primarily on
recognizing profits from their Web sites. Brick-and-click
retailers should work to maximize their sites' potential to
both build online sales and drive informed customers into their stores.
Although 45 percent of consumers have used a retailer's
Web site to research a product before purchasing it in
the same company's store, most brick-and-click retailers
are ignoring the non-transactional value of their sites
and are tracking metrics that treat their sites merely
as selling channels, according to Jupiter.
Into the Store
In a Jupiter Executive Survey, 46 percent of executives
reported that sale figures are the primary metric they
use to measure the success of their Web sites. According to the
survey, 23 percent of executives reported that they use
profits as the key metric.
"Brick-and-mortar retailers cannot ignore the impact that
their Web sites have on store purchasing because it is difficult
to quantify," Cassar said. "The retailer that spends its limited
Web resources shoring up the transactional elements of its site,
at the expense of the elements that would send a customer
with purchase intent into its stores, may ultimately lose
offline market share to smart competitors."
Getting on Track
Although integrating online and offline systems is inevitable
for brick-and-click retailers who want to use their sites to
drive shoppers to their real-world outlets, Jupiter said that
many retailers should "delay aggressive integration efforts
until after their in-store systems have been brought up-to-date
with software that was built to Web-based standards -- something
that will happen in due course for nearly all large retailers."
A Jupiter Executive Survey found that 31 percent of retailers
currently provide visibility of store inventory on their Web
sites and another 23 percent expect to offer this capability within the next two years.
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