E-Commerce: What’s Working?

E-commerce has certainly come a long way in just a year. IPOs have come and gone, companies have merged and diverged, and previously-unthinkable alliances now dot the landscape.

It seems then, so long as e-commerce remains in the midst of an extended honeymoon with the public, that now is as good of a time as ever to take stock of what is working well in the industry and what is not.

Travel Sites

Despite the fact that reports abound about the public’s collective plans to stay home for New Year’s Eve, online travel sites are reporting record business. Most popular among American Internet users is Southwest Airlines, which experienced a 26 percent increase in unique visitors from October to November, with 1.5 million users accessing the site.

Southwest was followed by American Airlines, with 1.1 million unique users, and Delta Airlines, with 979,000.

In a study by PC Data, 92 percent of 4,101 home-based Internet users surveyed said that they had no problems booking reservations online.

Offline Retailers

According to Nielsen//NetRatings, seven of the 20 most-visited shopping sites during the week ended December 12th are those of offline chain stores, including JC Penney, Gap, KB Toys and Barnes and Noble, among others.

Most noticeably, traffic to the Toys “R” Us site grew by a staggering 285 percent in November, on top of the 398 percent growth that the site experienced since last year at this time. Additionally, Wal-Mart and Target Stores sites each experienced increases of almost 150 percent in November.

Name Brands

Name brands carry weight with online shoppers. That trend has emerged during holiday shopping, especially in the apparel market.

Victoria’s Secret has emerged as a clear winner in this regard, with 90,000 daily visitors to its Web site for the week ending December 12th, which represents an 80 percent growth over the previous three weeks.

Creating a Unique Online Marketplace

It appears now that shoppers want something innovative in Web sites that have offline counterparts. For example, Office Depot’s site almost mirrors an Office Depot brick-and-mortar store, and has come out a loser despite the fact that it offers the shopper a sense of familiarity.

Ultimately, if online shoppers are sending the clear message that they want more bells and whistles, e-businesses would be wise to listen to that demand. After all, the problems that have plagued online shopping this year, including infrastructure ailments that shut sites down temporarily, slow delivery procedures that made customers nervous, and a lack of customer support could be the impetus for shoppers to go back to the mall.

Seducing the Elusive E-Shopper

A few possible enticements that customers seem to find irresistible online:

“Loss leaders,” or items that are priced far below their offline counterparts, and heavily promoted to lure the customer in to shop further on the site.

Free shipping and same-day or next-day delivery, even if it is promoted as a temporary offer.

Promotions that require the customer to visit the site regularly, such as iwon.com, the site where customers gain points toward cash sweepstakes prizes simply by clicking on various shopping elements within the site.

Coupons. They have worked wonders for years offline, so why not try them online? Barnes and Noble, for example, is using its offline stores to promote its Web site by offering a Web-only coupon to traditional purchasers.

Ultimately, e-businesses should not see their recent successes or failures as an excuse to lose focus. E-commerce is still in its formative stages, and as we have seen, a lot can change in a year.

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