What Sells Best on the Internet
According to experts, the next big e-commerce wave could be fueled by grocery companies - but not those that rely solely on home delivery, as e-commerce flameout Webvan did.
Mar 4, 2002 5:39 PM PT
Many lessons can be learned from the merchants that hawk the best-selling products in e-commerce. Among other things, experts said, top sellers offer goods with few surprises that are easy to ship; they successfully separate the product from the buying process; and they offer extensive resources that allow comparison shopping across multiple channels.
Companies like Amazon.com (Nasdaq: AMZN), for example, have had marked success selling books and music CDs. GartnerG2 research director Brian Smith told the E-Commerce Times that the reasons for such triumphs are simple: Buyers know exactly what they are getting, and the items sold are small and flat enough to be shipped conveniently.
"The things that sell best online are products that have the least surprise and the least variability," Smith said. "Books and music, by a landslide, are the top-selling items on the Web."
Smith added that items like gourmet foods, wine and jewelry, for which tastes can vary broadly, are a much harder sell online, as are perishable or fragile products that cannot be shipped as easily as books.
Easy Shipping Helps
Steve Telleen, vice president of Giga Information Group's Web Site ScoreCard service, told the E-Commerce Times that a growing number of businesses are following the Amazon model to boost revenue.
For example, Telleen pointed to online DVD rental services that let registered customers post a list of movies they want to view. Films on a customer's list are shipped to that customer as they become available, and the customer receives another DVD on the list when the previous item is returned.
Like Amazon's model, Telleen said, this concept combines a mass-distribution model with a good personalization feature, and it appears to be catching on.
That's the Ticket
Also among the Web's top sellers are companies that successfully separate the process of buying a product from the experience of using it. Experts said the best example of this approach is airline ticket sales.
Buyers are especially receptive to online air ticket sites -- like those offered by Orbitz and Travelocity -- because they provide centralized places for comparison pricing, scheduling and completing a purchase. Moreover, they do not require long waits in lines or lengthy telephone queues.
"It really helps if you are able to split the object being bought -- in this case, a vacation or business trip -- from the purchase process," Telleen said.
More movie theater tickets also are being sold online, particularly in large cities. Smith said concert and sports ticket sellers should be able to take advantage of this concept, too, especially as mobile data devices become commonplace.
Sealing Car Deals
In addition, successful sellers often offer comparison-shopping services that help seal the deal online or at a brick-and-mortar location. Smith said online car-buying sites are the best example.
Even though most car sales are not completed online, Smith noted, Web sites are playing an increasing role in getting buyers onto dealer lots to finish the purchase process, largely because there are vast amounts of presale research available at car sites.
The online research factor also helps account for sales of items like personal computers and peripherals, which Smith said are among the top-selling products online. The key is a multichannel approach: Computer makers either sell the product on their site, as Dell does, or use their site to steer customers to retail stores.
"What's emerging is that except for a few categories, the Internet is just another touch-point for the customers," Smith said. This is especially important, he noted, because about one-third of potential customers of most businesses do not have access to e-commerce yet.
"For retailing, the point is not to try and find one best channel, but to use multiple channels and let the customer choose which one is best," Smith added.
Sense of Community
Companies also would do well to emulate EBay by fostering a sense of online community. Smith said a community atmosphere has helped make hobby and collectible items among the most popular products sold online, largely because such an atmosphere brings together like-minded buyers and sellers.
Online merchants can score big with customers simply by making their lives easier. According to experts, the next big e-commerce wave could be fueled by grocery companies -- but not those that rely solely on home delivery, as e-commerce flameout Webvan did.
Telleen said Tesco, the UK's largest supermarket chain, has scored an apparent hit with a service that lets online customers order groceries and pay for them in advance. Items are located and bagged by store personnel, so they are ready to be picked up by customers.
Make It Convenient
Telleen said Tesco's service saves huge amounts of time for many customers and carries negligible infrastructure costs for the company because it makes use of existing stores. The service, which also includes home delivery options, has inspired similar online programs recently launched by American grocery chains Safeway and Albertson's.
But Telleen said other types of businesses also should experiment with using online scheduling and ordering services to boost business. Dental offices, dry cleaners, car-repair shops, barbers and hairstylists, for example, would do well to let customers schedule appointments online.
Self-service appointment scheduling not only would help free up personnel and streamline operations, but also would be welcomed by customers as a way to add flexibility to their busy lives, Telleen said. As he noted, happy and loyal customers can only add to a company's bottom line.