Great for Browsing but Not for Bargains,
The Virtual Mall Is Still Under Construction
By TINA KELLEY
t was the best of shopping, it was the worst of shopping. When Stephen Kornelis of Waconia, Minn., found the mint-condition
vinyl album -- still in cellophane and only $8 -- that he had spent the last 15 years searching for, it made the fruitless, two-month
Web search for paintball gear almost worth it. And his discovery of an obscure Keef Hartley CD almost erased the annoyance of
those unreturned phone calls from the paintball Web site guys who work from 2 P.M. to 4 P.M. and, he said, were probably "just
trying to hustle a few bucks."
"I have had as many negative experiences as I have good experiences" with shopping over the Internet, said Kornelis, a software
engineer.
In 1997, 19.7 million Americans visited retail Web sites from their homes, according to Mediametrix, a Web
rating service. Jupiter Communications, a research company, measured revenue numbers for American online
consumer transactions and found $707 million in 1996 and $2.6 billion in 1997. It projected $5.8 billion in
1998, in a $2.6 trillion retail economy, according to an LJR Redbook Research report. E-commerce is
expected to generate between $34 billion and $37.5 billion by 2002.
Some people love it, some tolerate it, others fear it. Fans of Internet commerce find it tremendously
convenient. Consumers can shop when it is raining without getting wet. No need to dress, let alone find taxis,
tokens or quarters for the meter. No more surly sales clerks, no more mall Muzak. In a recent survey by
Forrester Research, active Web shoppers rated convenience the No. 1 reason to shop on line, although in
off-line shopping, they found price and service as important.
In return for the convenience they offer, digital shops like CD Now, Amazon.com and Etoys don't need to discount items so deeply,
said James McQuivey, an analyst in online retail strategies at Forrester. "If they build the brand so it's going to be convenient, you're
not going to say, 'Oh, I can get it for 5 percent less at a bargain bookstore,' " he said.
Laurie Petersen of Hoboken, N.J., an editorial director for Barnesandnoble.com and an early Web shopper, knows how easy it is to
go on a buying binge by the blue glow of a monitor.
"Sometimes they'd run specials and you'd find yourself buying stuff just because it was really easy
to buy it," she said of certain sites in the Web's earlier years.
When her daughter, who is 15 months old, was born, Ms. Petersen became a major fan of Ibaby,
which sells supplies for infants.
"I found myself checking every day because they'd have specials," she said. "If you're the kind of
person who can spend the night with a catalogue and spend $300 on stuff, you're equally
susceptible on line, even more so perhaps, because it's that much easier."
The Web's wide selection is also a major draw. "You have available to you a global, worldwide
selection, and that is perhaps the real advantage" of Web shopping, said Kurt Barnard, president
of Barnard's Retail Trend Report, a forecasting business in Upper Montclair, N.J., who added
that so many choices could be paralyzing. "Fancy going through a department store looking for a
blouse, like Macy's on 34th Street, carrying nothing other than blouses from the basement to the
top floor," he said. "It would not be very attractive."
But online shopping is not for everyone. It can be more time-consuming than a simple trip to a
local store, especially if delivery times are considered. Some items, particularly brand-new ones,
have limited availability and no discount. The marketplace changes from day to day, it is lonesome and impersonal, and it can be
slower than a left-turn exit lane from the mall at 6:30 P.M.
And while 54 percent of American businesses have a Web page, according to a study this year by the Simmons Market Research
Bureau, there are some items that lose something in the translation to cyberspace.
"Tupperware is really discouraging people from setting up Web sites because they want people to burp the Tupperware, to feel it,"
said Michael Solomon, a professor of consumer behavior at Auburn University. And it is harder to generate peer pressure to buy from
a Web site than from a kaffeeklatsch.
Without some serious revision, he said, the Web will lose out on the buying potential of a whole breed of shoppers: those who travel
in packs.
"When people go shopping in groups, they buy more than when they're on their own," Professor Solomon said. "Until you can
simulate that, you're losing some sales potential." He suggested the creation of a Virtual Shopping Partner to say, "Go ahead, treat
yourself." After all, shoppers separated from their peers are less vulnerable to making spontaneous, serendipitous purchases.
"The more people going with you, the more likely you are to be taken to places you wouldn't go to on your own," he said. A partial fix
would "program some spontaneity in these sites," he said, maybe by having them pipe up with random suggestions.
McQuivey, at Forrester, said some sites are already catching on to the social needs of surfing shoppers.
"We don't just want to transact," he said. "We like being with people, and having that interchange, the feeling of people being with us.
So when we go to Amazon.com we can read what everybody else thinks about a book. The site is putting people in touch with other
people."
But Professor Solomon noted that Internet shopping can emphasize the gap between the haves and the have-nots. "Poor people are
obviously not going to avail themselves of these things, which is ironic because they have the most to gain because of their limited
access to stores in urban neighborhoods," he said. And even though physically disabled people and the elderly have a great deal to
gain from the convenience of shopping on line, he said, "these are the people that right now are the most Web-averse."
Another flaw in shopping-by-surfing comes from unrealistic expectations, some analysts say. online shoppers looking for instant
gratification become disappointed when they discover the World Wide Wait.
McQuivey not only studies online shopping; he also does it. "When I'm on line I have illusions of getting perfect information, that I'm
going to go to Junglee on Yahoo and find all the jeans that are going to fit me," he said, referring to a shopping software robot that
searches a large number of stores. "When I surf to Slate's Web site, I get so ticked off when I can't find any way to locate the pants I
want to buy.
"I really got mad at them on line" -- until he remembered that he could easily have gone all the way to a store and found that the slacks
were out of stock without feeling quite so wronged.
Still, it's not unreasonable to think that with such comprehensive information, educated E-consumers would be able to find killer
bargains and that anyone charging above wholesale would be gradually pushed out of business.
"Is this a boon for consumers?" Barnard said. "Theoretically, but only theoretically. Prices on the Internet have not proven to be
exactly bargains, but to the extent that they are, our own research has shown that the costs of shipping, mailing and handling seem to
obliterate whatever price difference there may be between the Internet and brick-and-mortar stores."
Services like Priceline, a travel site at which consumers name the price they are willing to pay for an air fare, are "theoretically the best
thing since sliced bread," McQuivey said, but not the economic model of the future. Besides, when consumers name a price that is
higher than the value of the item for sale, they lose out.
"It's not as easy to turn the whole thing upside down to let the consumer name the price," he said. "I don't see that becoming a major
model for trading goods and services."
Kevin Key in Berwyn, Ill., says conventional pricing will have to change. He has bought everything from rare stamps to a 65-gallon
rain barrel on line, usually for less than he would have paid elsewhere.
"I think the margin of profit in regular retail is going to have to go down, and stores are going to have to be pulling people in with
sales," he said.
While some analysts predict that Internet shopping will simply attract the same kind of customers who use mail-order catalogues,
others think it will draw more people into new marketplaces.
"I buy CD's like candy, but never at the mall, because the 18-year-old kid behind the counter is going to make fun of me if I put down
the CD I want, say, John Tesh," McQuivey said. "Plus they are playing horrible music by somebody called the Fumbling Planets.
Where's my space in that store?"
But he knows his place in cyberspace.
"I can listen to selections on line, and I can't do that in the store," McQuivey said. "I can't take the shrink wrap off there. The point is,
the potential to expand the total market is here."
Does that mean the modern store's days are numbered? Will the kindly yarn shop owner be available when a customer has dropped
seven stitches and can't pick them up? Will Salvation Army minions ring their bells in empty streets at Christmas, and the malls be
leveled into soccer fields?
Faith Hope Consolo, senior managing director of Garrick-Aug Worldwide, a large retail leasing firm, doubts that E-retail can conquer
traditional retail. "Tourists, they'll never do Web shopping, and your ladies who lunch will never do Web shopping," she said. "I really
think it takes the touchy-feely out of the whole experience."
But Barnard said he thinks obsolescence for some stores is a possibility. "I can easily see that groceries could perhaps become the
victims of the Internet," he said, "which would be a pity." And without stores, he wondered, how would people be exposed to new
products?
"Very often people are attracted just by the package of the thing, where they can take it off the shelf, hold it in their hand," Barnard
said. "That's not really going to be possible on the Internet, the way we know it at this time." But today's Web technology is
comparable to the dial telephone, he said, and advances will very likely change the online marketplace.
So why not a scratch-and-sniff pad on the desktop for sampling perfumes? Or cyber-sandboxes to sink your feet into, so a distant
cobbler can create the world's most comfortable, custom-fit shoes? An online makeover salon with an uploaded snapshot of each
customer, who could try on different hair styles and colors in the privacy of home?
"I think the horizons of imagination are the limit of what can be done," Barnard said. "You imagine it, and it will be done."
nytimes.com
Security Fears Still Plague Cybershopping
By TINA KELLEY
hile not many of the 19.7 million Americans who visited retail Web sites from their homes in 1997 have reported problems
with Internet credit-card use, some surfers -- and security experts -- say they are concerned enough about Internet crime
that they would rather auction off their firstborn child than use a credit card to buy something on the Web.
Kirk Bailey, a computer security expert with Regence Blueshield in Seattle, will not shop online now. But he said he could foresee a
time when he might.
"Right now, it's a provocative environment and lots of things can fail, even with good intentions and best
practices," he said, citing some instances in which criminals have obtained credit-card numbers taken from
inadequately protected servers on the Internet. "It's much more dangerous than people think. It's not the $50
you get charged for each unauthorized use, but the crooks use this information to steal your identity."
James McQuivey, an analyst in online retail strategy at Forrester Research in Cambridge, Mass., said online
security was a problem of perception, not technology. Instead of bragging about "SSL level 5 encrypted
browsers," he said, sites would do well to post slogans on every page like "Worried about your credit card?
So are we," and offer a toll-free number for the electronically timid to call to give their card numbers.
As a precaution, some retailers will not store credit-card numbers, or they assign identification numbers to
their customers for online use while keeping credit-card numbers behind a fire wall.
"I have yet to see any big data warehouses get hacked," McQuivey said.
But Molly Bell, an information specialist with a communications firm in Washington, said she suspected she had been hit by a hacker
when, soon after using her credit card in January to sign up for Compuserve, the Internet service provider, she had to contest several
unauthorized credit-card charges to something called "XPICS Publishing." When she called the company, which distributes
pornography online, it told her there had been charges to her card from two other e-mail accounts, neither of which were on
Compuserve.
After two more unsolicited charges appeared in April, she canceled her credit card and said Compuserve required her to give her new
card number unless she opened a corporate account for $75 more.
"All this confusion demonstrates just how easy it is for someone to commit Internet retail fraud," she said after quitting Compuserve.
Frank Fiore, an online shopping guide for the Mining Company, the Web search engine, said he had never heard of an online theft of a
credit-card number. But he said he was wary of person-to-person sales through auctions or news groups when nothing was known
about the parties except their e-mail addresses.
He advised obtaining and verifying phone numbers, street addresses and as much information as possible about prospective partners
in E-commerce, whether they are individuals or businesses, and using an Internet escrow service. Such services as www.iescrow.com
or www.tradesafe.com will, for a fee, act as security middlemen, holding payment for an item until both seller and purchaser are
satisfied with the deal.
Bidders in online auctions should be careful to research the market value of the desired item so as not to bid higher in the heat of the
moment, he said. And beware of auction sites that do not control the transactions and the products sold, as these are no more secure
than transactions with individuals.
"Then there are the more direct rip-offs, where they have every intention of taking your money," he said, citing pyramid schemes,
work-at-home plans and offers to clean up credit reports. "Now instead of reaching thousands of people, they can reach hundreds of
thousands, through E-commerce."
nytimes.com
The Robots That Rummage
By TINA KELLEY
nstead of letting their fingers do the walking through the Yellow Pages to get information from merchants, many consumers now let
a software robot do the crawling to find bargains online. So-called softbots, or bots, search Web sites at once. They can reach
into the more obscure crevices of the Internet as well as regular Web pages.
One of the more useful bots is www.acses.com, which will search about 25 online bookstores for titles. It
first displays how many vendors have been polled and how long your search will take. The results are listed
from cheapest to most expensive, with prices, delivery costs and estimated times of arrival.
Jango, one of the earliest softbots, presented quick information on computers and fragrances recently on this
user's first experiments with it. But the results could not be replicated in later tries, probably because of
snoozing servers or shifting availability.
Jango goes to several hundred stores and review sites and some auction sites. "What's really nice about
Jango is you're contacting sites in real time so you can get up-to-the-minute information," said one of Jango's
inventors, Oren Etzioni. "That's important with stores and essential with auctions. Others get the information
once a night -- every night you send a copy of your catalogue to the softbot -- which means the information
will not be as up to date."
Another softbot, Junglee, provides six sites for searching -- Web Market, Yahoo Travel, Yahoo Visa Shopping Guide, Hotbot, Snap
and Compaq -- though it can be hard to tell which one is best for a particular item. The Compaq site, for example, has searchable
categories ranging from apparel to outdoor gear, as well as electronics.
A downside to the bots: you do not always know if you are surfing the entire Web or just the merchants who have paired up with
particular search sites.
Jango is working on a version that will allow shoppers to order from within Jango without going to the store's ordering page. So
where's the superbot that searches all these sites, then searches your house or apartment to see what you really, really need?
nytimes.com
For those of you not yet reading the NYT's regular Thursday feature section -- Circuits -- this is what you're missing.
BTW -- very little in these articles looks good for amzn bulls!!!! |
