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On Dasher, on Dancer, on Prancer and Vixen, on Sale Online, on Time and in Good Condition

Now that the novelty's worn off, consumers will be more particular about buying on the Internet, and retailers will face higher standards of quality and service.

November 16, 2000|ABIGAIL GOLDMAN | TIMES STAFF WRITER

The honeymoon is over for online retailing.

This time around, the third year of widespread online selling, consumers are far less likely to tolerate major--or even minor--glitches as a necessary downside of wondrous new technology.

"I think the affair has ended and now we're back to the traditional relationship between consumers and their retailers," said David Cooperstein, research director for Forrester Research. "Which means you go to a store you trust, for products you expect, at the price you are willing to pay."

Returning Web shoppers, now less awed by online shopping than they were the first two years, are likely to be more demanding of service and quality this season.

And though the number of first-time Web buyers could run as high as 14 million in 2000, the newcomers to the online party tend to be far less patient with their computers than the more tech-oriented shopping pioneers.

In fact, unlike the "early adopters" who first bought online, new users this year will look and act more like the average American consumer. As such, these buyers will decide how to shop based on ease and advantage rather than scientific exploration; they also are more likely to choose their merchants based on familiarity rather than a splashy ad campaign.

"There's going to be less and less patience for slow sites, difficult transactions or poor customer service," Cooperstein said.

That means far more pressure than last year for Web sellers to present easy-to-use sites, quick responses, clear privacy protections and, perhaps most important, on-time delivery and hassle-free returns.

Toysrus.com already got that message.

Last year, the biggest specialty toy seller was overwhelmed by the sheer number of orders to its online site and tripped into a fulfillment disaster that prevented some orders from arriving before the holidays.

After that public black eye and fines from the Federal Trade Commission, Toysrus.com said in August that it would partner with the country's dominant online seller, Amazon.com.

With Toysrus in charge of inventory and Amazon essentially acting as a third-party Web host and fulfillment house, the joint venture allows Amazon to continue offering toys without enduring the merchandising headaches that come along with building a new business.

Toysrus.com, on the other hand, offers its parent company's power to negotiate with manufacturers, while tapping into one of the best Web sites and fulfillment operations in the industry.

Toysrus is the biggest example of what many "old-economy" sellers predicted: Most "dot-coms" and old-time retailers will be unable to go it alone in the new medium.

E-tailing will increasingly have more to do with retailing than with "e," but the traditional retailers still need some way of keeping the virtual lights on in their new, World Wide Web stores.

"Holiday season 2000 will be the revenge of the brick-and-mortars," said Sean Kaldor, NetRatings' vice president of e-commerce. "Offline giants such as Old Navy, Kmart and BestBuy, all of which had little or no Web presence last year, are poised for extraordinary growth during this holiday season. The biggest question is: Will these companies be able to survive the intense infrastructure issues that plagued many companies last year?"

And traditional retailers have even more to lose from disappointing their shoppers.

A failure in security, poor selection, late deliveries and other problems won't just keep people from coming back to an online store, it could keep them from the real-world stores as well.

The biggest shakeout this year may be watching traditional retailers straddle the line between aggressive marketing and meeting demand.

In the meantime, as investors' capital dries up, Nasdaq stumbles and many would-be e-tailers find themselves with far less cash on hand, dot-com names are looking more like mall marquees.

Many of the weakest players have dropped out altogether, including cosmetics site Eve.com, Priceline's WebhouseClub.com, DreamWorks SKG and Imagine Entertainment's Pop.com, Toysmart.com, discounter Miadora.com and many others so small that many shoppers hadn't heard of them by the time they closed their virtual doors.

Hundreds of other sites still hanging on with bare-bones staff and dwindling funds could well find themselves on the road to dissolution soon.

As the number of sites shrinks by the minute, so, too, do many of the discounts and specials born of last year's intense competition.

Last year, when venture capital money was flowing like water and many retailers aimed to capture market share at almost any expense, lucky consumers bought high-tech gadgets and consumer electronics for at or below the retailers' own cost.

But with spring's tech stock slide and venture capital lenders' new focus on "paths to profitability," consumers are far less likely to find such eager promotions.

And even as the number of Web visitors continues to rise, some financiers raise the question about the long-term potential for online shopping.

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