Are E-tailers Too Dependent on Santa?

In a normal time, in a normal place, with summer nearly ending, e-tailers would be bracing themselves for the annual nail-biting and teeth-grinding weeks that precede the holiday gift-buying season.

Will holiday 2001 surpass last year’s sales figures? Will struggling e-tailers be able to buy some time and find salvation in a rush of online holiday sales? Which companies will emerge as industry leaders? Will there be any surprises?

It’s hard to find anyone who cares about those questions now.

This column was written to examine the issue of the holidays and e-commerce. In doing so, there is no desire to make this topic seem remotely in the same galaxy of importance as the tragedies of September 11th.

This is an attempt to discuss what we would have been discussing, to discuss problems of some significance, even if that significance has been surpassed in unthinkable fashion.

E-tailers have annually counted on the holidays to be their most profitable season. That the word “holiday” itself is now charged with a whole new meaning, given the horror that so many families are now facing, is something e-tailers will now have to face.

Way Back When

A week ago (an eternity ago), in a high-profile appearance designed to keep the Internet’s leading e-tailer visible, Amazon.com founder Jeff Bezos stood at the opening of the Nasdaq Marketsite, and proclaimed holiday 2001 “promising.”

At the opening, Bezos said: “There are a bunch of great new products coming out. There are a lot of great video games and other exciting products around the corner.”

Unlike smaller, struggling online merchants, Amazon is likely to continue its uphill climb to profitability, whether the holiday season delivers or not. Further, Amazon emerged during the 2000 holidays as the most visited e-commerce site of the season, according to Nielsen//NetRatings.

Out With The Old

But what of online shoe retailers, hardware merchants, gardening suppliers, PC sellers and hundreds of other, smaller e-tailers? How will they fare?

With the country in turmoil, with the national unemployment rate already higher than it has been in quite a long time, with leading economic indicators fluctuating between mediocre and dismal, retailers both on the Web and off are bracing themselves for a challenging holiday shopping season.

A recent poll from ABCNews.com found that 37 percent of Americans have made a purchase over the Internet, a 10-point increase when compared to a year earlier. However, the current state of the economy and the nation might have a greater effect on this year’s online holiday sales than the steady increase in Web shoppers.

Times like this should cause e-tailers to step back and take a hard look at what works, not just at the end of the year, but throughout the year. To not wait for Santa to come to the rescue, because you never know what might divert Santa from his course.

Familiarity Talks

As a rule, Web shoppers appreciate the familiar. If a Web site has a name on it that rings a bell from another channel — say, the local mall — all the better. If kitchen appliances on the home page bear a brand name with decades of Americana behind it, score one for the home page.

Likewise, if an e-tailer can still muster the capital to mount an aggressive pre-holiday advertising campaign on multiple channels — including print, radio, TV and the Web — chances are the unique visitor count may climb mightily.

And one of the primary lessons of e-commerce to date is that offering product photos and clearly written product information, as well as easy navigation and purchasing tools, is the way to convert those visitors into shoppers.

If an online e-tailer has a powerful sibling in the brick-and-mortar world — read: The Gap, JC Penney, Macy’s, etc. — then in-store Web promotions and the strategic placement of Internet shopping kiosks will go far in integrating channels and encouraging sales.

Web-Only Options

But not every e-tailer can claim a big brother out there in the “real world.” What then?

It appears the best and brightest will align themselves with the most powerful on the Web.Think Drugstore.com and Amazon. Think Travelocity and America Online.

In the end, few e-tailers will succeed by going it alone. The winners of the e-commerce race, those who prosper long past holiday 2001, are likely to be the e-tailers that have not only the most in-demand products, but also the advantage of multiple sales channels and key alliances. Successful e-tailing is becoming a collaborative endeavor.

Return to Basics

So what about those nagging questions, the same questions we ask ourselves every year about this time? Who will win the online holiday sales race? Who will lead? Will the little guys get to the finish line?

At some point, we might need to ask something different. We might need to ask what the best strategy is to maximize increased traffic and ensure longevity well past the holidays.

Business-to-consumer e-commerce is not about a few weeks of shopping at the end of the year. Instead, e-tailers will need to focus more comprehensively on the big picture.

As soon as they are ready.

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.


3 Comments

  • I hope this post dosen’t offend anyone as that is not my intention. But i’ve been doing some thinking and the events of Sept 11th are directly related to it.

    If/when we do retailiate for the devasting attack on our soil, even the government acknowledges that there will be increased attempts at terrorist attacks on U.S. In the light of recent events it is safe to say that we will not be successful in thwarting ALL of the attempts. As the attacks increase on our soil, people will be wary about anywhere in large groups that might make them easy targets for terrorist attacks. Does anyone think that this might spur a resurgence in the dot com economy as people start to prefer making purchases online rather than venturing from the precieved safety of their communities? I know this may seem far fetched, but the day after the attack, Manhattan, one of the busiest places in the world, was virtually deviod of people on the street. If 1 or 2 other attacks were to take place within a short time span of say 2 -4 weeks, how many people do you think would keep trying to go about business as usual? I’m interested in hearing your opinions…

    • I think that the recent acts of terrorism will make people think twice about going to malls,

      especially during X-mas. The net is a much safer way to shop and I AM sure it will be

      marketed as such.

  • Every business has its Xmas . . . for many it is not during December and all businesses have to rely on it to make their year. All businesses face the phenomenon of the 80/20 Rules, one of which says that 80% of one’s business is done in 20% of the time they are open for business (year, month, week, day).

    There are many other aspects of the 80/20 Rule:

    * 80% of the readers of the read only 20% of the articles listed on newsfactor.com — or, for businesses selling products it is that 80% of the business is done on 20% of the firm’s selection.

    * 80% of the articles come from 20% of the resources available

    There are many ways to apply the 80/20 Rule. But to say that retailers, either off line or on line should not depend on the Xmas business for making their year when does the writer expect these retaiers to get the sales they need to stay open?

    Alan

    Alan J. Zell, Ambassador Of Selling

    [email protected]

    A member of http://www.salesbureau.com cadre of speakers, coaches, and trainers.

    Winner of the Murray Award for Outstanding Achievement in Sales & Marketing

    Chairman, PNW Sales & Marketing Group

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