NEW YORK E-tailers, say hello to e-volution.
The number of online stores is expected to continue to decline in 2001, even though Internet spending is projected to grow, online retail experts predict. What should separate the flounders from the sites with legs are these qualities: Speed, panache and lots of access.
At the National Retail Federations 90th Annual Convention & Expo here recently, retail analysts and chief executives talked about how service, brand allure and affordability make their Internet sites successful. In one session, experts said retailers have no choice but to go online.
"Just four years ago, e-tailing was a wide-open field," said Stephanie Shern, global and U.S. director of retail and consumer products markets at Ernst & Young. "Now you cant start a business without an e-tail address."
According to Ernst & Youngs Global Online Retailing survey, conducted in November, more than 4,400 interviewed online buyers spent on average $896 on 13 purchases in the previous 12 months.
But because the Internet is still so new, and so many shoppers are uninitiated, how the world shops and what it buys will change. The following are some of the findings of Ernst & Youngs survey, and how retail panelists responded.
By mid-2001, the roughly 22 pure-play e-tailers out there will be weeded down to eight publicly owned firms, said Anthony Noto, vice president of Goldman Sachs & Co. By that time, he also expects just four companies to be profitable or near profitable.
Fifty-seven percent of shoppers surveyed said they are buying less in stores. While this means bricks-and-clicks are stealing market from their own stores, panelists said it is necessary in order to capture the future market, which is cutting its buying teeth on computer keyboards.
"I think we all knew the world was overstored," said Mark Goldstein, chief executive of BlueLight.com, the online spinoff of Kmart.
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