By Keith Regan E-Commerce Times
03/07/02 6:06 PM PT
Giants win when it comes to brand, so what is apparently keeping some smaller sites in
business is word-of-mouth.
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By now, things should be clearer. The shakeout should have left e-commerce neater and
more orderly. A variety of companies should occupy various sectors, each with its own
distinct reason for being, its own niche, its own special appeal to consumers.
But that hasn't happened. Despite all the upheaval that has taken place to date, it has
not gotten easier for a consumer to navigate the e-commerce landscape. In fact, being
plunked down in E-Commerce Land is a lot like being dropped off in an anonymous shopping
mall.
You know the place: The food court is at one end, with anchor stores at the end of long
corridors lined with pretzel shops and jewelry stores. Thanks to climate control, it's
impossible to know whether you're in Florida or Minnesota.
There's a reason for that, of course. Stores want shoppers to feel at home even when
they're away from home. But online, a mall in Minnesota is only a click or two away from
one in Florida. Online, there should be more distinction between stores.
Distinguishing Features
Certain sectors have developed clear leaders that provide compelling reasons why
consumers should choose them over their competitors. EBay
is a strong example, since it is the clear-cut leader in the auction space.
Beyond that, though, it gets harder to discern not only which company is the leader in a
particular space, but also why one should choose site X over site Y. Take electronics,
for example. For a sector that has suffered a harsh beating, it still offers an amazing
array of options to consumers.
But by its nature, selling electronics limits what a retailer can do. Price margins are
not huge, so the price differential between sellers like
Amazon.com, Buy.com and
BestBuy.com isn't all that great. For instance, a Palm
m100 recently sold for US$94.99 on Amazon and $94.95 on Buy.com.
Even Steven
With price out of the mix, what can serve as a basis for a first-time e-shopper's
buying decision? Most sites present amazingly similar interfaces, with product pictures
and descriptions that could be found at any electronics-peddling site.
That leaves word-of-mouth and brand identification. We know that giants win when it comes
to brand, so word-of-mouth is apparently what is keeping some smaller sites in business.
The travel sector offers a good example. Ask the average consumer to tell you the
difference between Travelocity and Expedia. Most probably will think about the last
commercial they saw and drift toward Expedia.
But word-of-mouth likely is pulling them in a dozen different directions. CheapTickets?
Hotwire? Priceline? The choices are dizzying. However, as someone who's sifted through
them, I can attest that once you figure out how to navigate the various sites, you once
again find surprisingly similar prices.
Breaking Free
So, what will it take to create some distinction? Time, for one thing. The clutter out
there is nothing compared with the chaos of two years ago.
Another factor is leadership. For example, Amazon has said it will distinguish itself
with low prices, but plenty of book and music sites are ready to see and call the e-tail
giant on that bluff.
Amazon also deserves credit for leading with its free shipping offer, which
several other e-tailers have recognized the need to match.
Choice is important, don't get me wrong. This isn't a call for vertical monopolies, by any
means. But when all Web sites start to look and sound the same, it's hard to see how
consumers can make sense of the online jungle.
In fact, the current state of confusion only fuels the likelihood that traditional
retailers will win the day online with their brand advantage. After all, a confused
customer is going to head for the comfort of the known quantity.
They'll revert to old habits and take a left at the pretzel shop -- unless pure-plays
give them a compelling reason to turn around and explore parts of the mall that are less
familiar to them. It's not easy to get shoppers to change their habits, so dot-coms had
better have some pretty neat tricks up their sleeves.
What do you think? Let's talk about it.
Note: The opinions expressed by
our columnists are their own and do not necessarily reflect the views of the E-Commerce Times
or its management.