Shoppers haggle
on e-commerce
sites
By Reshma Kapadia
NEW YORK (Reuters) - With online sales expected to double this
holiday season, some Internet sites are letting shoppers to haggle
over prices, bid at auctions or get deep discounts on name
brands-part of a drive by retailers to stand out in an increasingly
crowded field.
All told, shoppers are expected to spend $2.3 billion online during
the 1998 holiday shopping season, up from $1.1 billion in 1997,
according to Jupiter Communications, an Internet market research
group. That could hurt some other traditional retailers, on the
margins.
"It will shave a bit off from the brick-and-mortar retailers that have
poor selection, bad customer service and are not competitive in their
own world," said Maria LaTour Kadison, a senior analyst at
Forrester.
Something for everyone is the name of the game. In addition to
well-known retailers such as Macy's, JCrew and the Gap, a host of
merchants that are not exactly household names are now online,
hoping to gain attention this holiday season.
Some are offering deep discounts on designer clothes, furniture and
electronics, while others are sponsoring sites where customers can
bid on hard-to-get items-such as Hasbro Inc.'s Furby, the season's
hot toy phenomenon. Other sites allow shoppers to haggle for the
cheapest price possible on everyday products.
Cendant Corp.'s Netmark, for instance, offers the Haggle Zone for
shoppers who are looking for the chance to fight for the best price
on popular toys over the computer, rather than paying the going rate
at the traditional stores. The site has a patent pending on the
haggling feature.
Netmarket, which also has auction and flea market options, offers
1,700 brands and derives its revenue primarily from membership
fees. Although anyone can buy products from the site, members get
a larger discount, expanded warranties and a lowest-price
guarantee, said Kerry O'Neil, vice president of interactive services at
Cendant.
Searching for discounts is a mission for many shoppers, and many
Internet retailers are hoping to grab market share by appealing to
those looking to buy on the cheap. Many of these players are able
to undercut the prices of traditional retailers because they have
lower costs.
Deal-a-Day, based in Norwood, Mass., guarantees that all of its
prices on its designer clothing are 30 percent lower than anyone
else's.
Bluefly Inc., whose site was launched in September, is a discount
retailer that offers designer apparel-everything from Prada to Calvin
Klein -- and ships purchases within 24 hours. At the moment, it
considers the department stores as its primary competition, Chief
Executive Ken Seiff said.
Earlier this month, Lycos Inc. chose Bluefly as its "premiere
commerce vendor," meaning that the discount retailer was deeply
integrated into the Internet gateway's site with advertising and
search words. This week, it also announced a deal with Yahoo! Inc.
"We consider this a critical season even though it is our first,
because time is so compressed on the Internet," Seiff said.
Many of these emerging retailers have quickly shot into the
hot-stock realm, at a time when many Internet-related issues are
soaring.
eBay Inc., which sponsors an online auction site, is a good
example. Its stock soared to over $200 from the $50 at which it first
traded in late September.
Santa Monica, Calif.-based eToys Inc. offers popular toys such as
Beanie Babies and Furbys without the hassle of pushing and
tugging for them at the shopping mall. Some analysts think it may
be the next Amazon.com Inc.-the Internet's biggest book
retailer-even though Toys 'R' Us Inc. -- the largest U.S. toy
retailer-recently made a move online.
"eToy is only a year old, but they have been spending tons of
money on advertising to create brand and awareness within
everyday lives of people, not just when they are online," Forrester's
Kadison said, adding that it was important to target customers at all
times, just not via the Internet.
"Their benefit is that they have Toys 'R' Us, which has tons of
problems off line, coming in after them. It would take a lot for Toys
'R' Us to beat them. This holiday season may push eToys into the
next stratosphere."
Toys R Us, which has been hurt by heightened competition from
discount retailers and warehouse clubs, has recently closed stores
and cut back on its purchasing.
(Reuters/Wired) |
