Top of the E-Class
by S. Dawe and W. Evans, with M. Denney
Ranking and Best Practices of Over 170 Web Sites
Retail practitioners and industry observers have watched the Internet with some curiosity since 1994, when they first became aware of a handful of well-publicized pure online companies selling over the net. Initially, most analysts viewed this new technology with some disdain, but more recently, this view has changed with the acknowledgement that this medium will be bigger and, increasingly will have greater impact than originally envisioned, even in the more conservative Canadian marketplace.
The premise to this study is the belief that e-commerce will have significant strategic implications for how all commerce is conducted - whether it be business-to-business or business-to-consumer. There has been a myriad of information and hype surrounding entailing and its impact on the retail industry. While data varies widely, there is sufficient information on the revenue of public e-tail companies to state that cyber-shopping is experiencing explosive top-line growth in North America. About one-quarter of Canadian retailer chains now have an online presence That, along with the large numbers of U.S. and other international sites, has made this a highly competitive channel. But fallout has begun, as witnessed by some recent e-tail failures and consolidations, and there will be many more as financing runs low or runs out. For the balance of 75% of retailers, many of which will develop a web site within the next 24 to 36 months, and many more internationally, the channel will become even more crowded. However, there is an opportunity for this to be a very rewarding medium for the leaders, or a very punishing one for the'also rans'.
Another premise of this study is that online retailing is not a fad, nor a threat, but rather a valid distribution channel in its nascent stage. The speed of consumer acceptance is unprecedented and will continue to accelerate as access to the Internet grows within the general population and its useage and technical capabilities continue to deliver ever-more sophisticated applications for online shopping. By 2003, it is estimated that the channel will conservatively represent 4.5% of total retail sales in Canada.' Even if consumers do not actually buy online they will increasingly make this their first source of information to assist them in making a purchasing decision. A further sign of the increasing importance of the e-channel is the commencement of tracking e-sales data by both the U.S. Department of Commerce and Statistics Canada.
This study moves beyond the media hype surrounding this burgeoning distribution channel. It is our view that entailing now warrants research that goes past examining projections of future online demand and e-channel sustainability. This research presents a high level review of the performance of some of the key players participating in the e-tail environment, along with the identification of current 'best practices' By narrowing the focus of this review to the 'front end' component of entailing, we recognize that it is only a part of the process, but the critical one in attracting and engaging a consumer to enter a site, browse, purchase and check-out.
The third premise of this study is that the c-channel represents a quantifiable opportunity, particularly for Canadian 'brick-and-mortar' retailers, not only as a means to meet the growing demands of a domestic market, but as a means to extend the reach of 91 retailers to international markets.
This study initially looked at more than 200 e-tailers participating in 17 merchandise categories, operating from Canada, the U.S. and Europe. Based on this initial search, we were able to generate 170 ranked sites of which the 'Top 40' are included in the Highlights section of the report. A full listing is found in the Appendix. As part of the study the 10 'best practices' associated with Internet retailing were identified along with specific examples of the leading e-tail leaders who are implementing these practices.
This review was undertaken during the months of January and February, 2000. The state of the e-tail landscape is dynamic and subject to rapid change. The standards of 'best practice' are continually being raised as new technology becomes available. Additionally, the reality is that during this year, there will be e-tail failures and further consolidation in the e-channel to counteract the profusion of new entrants during the past twelve months.
While there are many common marketing and merchandising issues in both online and offline channels, there is a dramatic divergence when it comes to the most serious issues facing online e-tailers. These include: ensuring security and privacy and delivering live, knowledgeable customer assistance in the purchasing process. And to add to the e-tailer's challenge, the online consumer has a much higher expectation of the shopping experience on the net and is less forgiving and less loyal.
In recognizing the online consumer's high expectation and low threshold for mediocre sites, the information in this report was developed to serve as a practical reference for retailers to more clearly understand the competitive strengths and weaknesses of the category leaders in the e-channel. To that end, we have identified the'best practices'of these e-tail leaders in the development and design of an online strategy.
The rankings table
Download the rankings table as pdf document:
As one file
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