POWER TO THE PEOPLE
ON THE INTERNET’S E-COMMERCE LANDSCAPE, IT’S THE CONSUMERS WHO ARE WRITING THE RULES.

Byline: Dick Silverman

To the constantly growing population of Web-savvy consumers, “e-tailing” is fast becoming “me-tailing.”
Customization — of assortments, of service, of the general online experience — has emerged as the Internet shoppers’ newest and probably most fundamental priority, say Internet market researchers. Consumers, even at the individual level, will increasingly call the shots in the Internet world, and they expect to have their demands met. It will be up to retailers to equip their online operations to offer that level of service, say researchers and consultants.
“For this new breed of consumers, e-business really means “me-business — my time, my place, my price, my way,”‘ according to a report from PricewaterhouseCoopers titled, “The B2C Phenomenon: Perspectives on the Impact and Evolution of E-Retailing.”
On the Web, retailers must focus on consumers rather than products, and especially, treat each customer as unique, the report said.
The need for retailers to do something effective grows increasingly urgent. E-commerce is skyrocketing, PricewaterhouseCoopers reported. Online sales are projected to reach at least $20 billion, or 3 to 7 percent of total non-auto retail sales, within five years.
As consumers continue to move online, more and more brands will be forced to enter e-commerce, PricewaterhouseCoopers said. Multichannel retailers will be the rule, not the exception, and consumers will expect retailers and brands to be available anywhere they want to shop.
Research indicates that consumers are gravitating to retail Web sites that are tied to stores they already know, despite the fact that many of those retailers were late to market.
“The store-based retailers took their time joining the Web frenzy, but once they jumped in and had something to offer, the shoppers came running,” noted Jeff Boudreau, principal of logistics and e-commerce at Kurt Salmon Associates. What caught many retailers off guard was the speed at which the market boomed. “Many of these merchants never expected people to so quickly embrace the idea of buying everything from shampoo to sneakers to sexy lingerie on the Web,” said Boudreau.
According to research by Greenfield Online, e-retailing activity has increased each quarter and nearly 69 percent of the online population had made at least one purchase in the previous 90 days. Shopping online has actually become the norm for almost 83 percent of people with online access, Greenfield Online noted.
According to a Yankelovich Monitor study, there was a 100 percent increase last year in consumers who bought online.
Awareness of and satisfaction with the Internet as a shopping tool is growing. Yankelovich found as many as 60 percent of consumers say that when they want to find information about companies, they almost always turn to the Internet. And 64 percent of consumers agreed with the statement that the single most important change created by the Internet “is giving consumers like me control, as opposed to marketers having all the control.”
“The Internet is empowering,” said Steve Kraus, a partner at Yankelovich Partners. “It puts consumers in the driver’s seat, and they are starting to take the wheel.”
In the Yankelovich survey, 65 percent of consumers said that having a personal computer has really changed their lives for the better and 92 percent said they now feel much more knowledgeable about what they buy and where they shop than before, thanks to the Internet.
As many as 60 percent of consumers said they shop online because it allows them to “avoid the hassles of going to a store,” and 56 percent said it was because it enables them to “buy anytime — day or night.”
“The Internet has created a world without physical or intellectual boundaries,” stated Kraus. “It has allowed consumers to buy what they want, when they want, and, in fact, be who they want.”
Research by PricewaterhouseCoopers showed consumers are convinced they can get better bargains on the Web, another form of empowerment. “Online shoppers want it all, and they want it all for less,” said Mary Brett Whitfield, principal consultant and director of PricewaterhouseCoopers’ E-Retail Intelligence System.
Low prices now are expected on the Internet, and successful e-retailers will combine low prices with a site that is easy to shop, features a wide selection of merchandise and offers superior customer service and fulfillment, Whitfield said.
Studies found nearly half of all Internet shoppers perceive Web prices as lower than store prices. As many as five of 10 Web shoppers usually shop online to take advantage of price promotions and to find low prices, the surveys revealed. And three-quarters of respondents said they would shop online more if prices were even lower.
To capitalize on the opportunity for a personal relationship with online shoppers, “Internet retailers should ‘customerize,’ not customize, their sites,” said PricewaterhouseCoopers in its study. Online retailers will have to “retain customer loyalty by reorganizing, exploring and appealing to the differences — rather than the similarities — among consumers,” the report stated.
The more a company learns about its customers, the better it can serve them, the report continued. “And the better it is able to met their unique needs, the more loyal these customers become.”
Pure-play online retailers, and their brick-and-mortar counterparts, are in a battle for consumer relationships, the PricewaterhouseCoopers study concluded. “In the Internet world, almost nothing matters except who owns these relationships. Consumers are clearly voting with their pocketbooks, and they’re willing to change their shopping behavior if they find it in their best interests to do so.”
Managing consumer relationships will be key to success in the new interactive environment, the study contended. Retailers will have to control what shoppers see and buy, monitor how they navigate their sites, keep track of what they purchase and provide personal-shopping tools, it stressed.
Online retailers will have to focus on the economics of Internet consumption, the study warned. “We will need to know who bought what, where and when, and what else they bought with it. We will need to know how much consumers are spending and where else they are spending it.”
In the view of PricewaterhouseCoopers analysts, “The Internet is a phenomenon, the likes of which only comes along once in a lifetime.” But it also is “a gigantic electronic vending machine for everything on sale on earth.”
The Web has altered industries and the nature of business in profound and irreversible ways, the report observed. “The retail industry is going to be affected in the same compelling and enduring ways. The Internet’s scope and pervasiveness will impact all companies that market or sell things consumers and businesses buy.”
The rules that work for retailers in the Internet world eventually will become the rules for all retailers, PricewaterhouseCoopers maintained. “Almost nothing matters except who owns the relationship with consumers,” it declared.
And as Internet use continues to rise, the research firm projected online retailers would find they were competing not just with each other, but with communications, financial service and entertainment companies that also want to have Web relationships with consumers.
“They want to own a whole segment of the consumer’s life and a whole chunk of his or her spending. They’re not interested in share of market or share of category. They’re interested in share of life.”

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