After building their technical infrastructure and boosting brand-awareness, recent news announcements are pointing to a strong industry-wide emphasis on providing value-added services and increased customer support. Along these lines, Cyberian Outpost (Nasdaq: COOL), an Internet-based retailer of computer products reported a new, broad-based customer-oriented initiative that may raise the stakes in the intensely competitive e-commerce market.
The company announced on Monday, that it will provide free overnight shipping of its products to customers in the United States, within the framework of a new “TruePrice” policy, which applies to all computer products at Outpost.com, and OutpostAuctions.com. At the same time, the company also announced the expansion of its customer service Contact Center hours.
“As the Internet retail space continues to evolve, customer service is becoming a core factor that differentiates one retailer from another,” said Darryl Peck, president and CEO of Cyberian Outpost.
Indeed, Outpost is wise to reinforce its Internet presence, in light of significant recent mergers and marketing alliances among Beyond.com, Buydirect, CNET and America Online. Additionally, PC suppliers like Dell, Gateway, Compaq and, most recently IBM, have expanded into the consumer software and PC peripherals segment of the market, posing a growing threat to Cyberian Outpost.
The True Price of Buying Online
According to Outpost, the addition of free overnight shipping to the company’s existing business model represents an attempt to end the shipping-cost confusion that consumers have experienced when ordering products online. Rather than leaving customers to guess at their total checkout price, shoppers at Outpost.com will immediately know the “TruePrice” of their purchase.
“In a market where shipping costs are not clearly defined, it is often difficult for consumers to understand who is offering the best deal,” said Peck. “By offering free shipping and a 30-day money back guarantee to consumers, we are effectively taking the guesswork out of online shopping.”
Outpost hopes that its new customer-oriented initiatives will generate enough consumer interest to further position the company as an innovator in the Internet retail space.
To help spread the word, the company reported that it will launch a high-profile marketing campaign that will include radio and television commercials, as well as Internet banner advertisements.
Wall Street isn’t all that excited about this news. Cyberian Outpost’s moves will surely raise awareness of the company, but at what price? The TruePrice policy will cut into margins in a sector that is known for low margins, and the advertising will also cost money as well. Add all this to the fact that Cyberian Outpost lost $25 million last year, and you can understand the concerns of investors.
Cyberian Outpost stock was off fractionally in early trading today, after also falling slightly after the news on Monday.