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Commentary: E-tailing goes mainstream

Online retailers have done a lot of work behind the scenes to make the Net a viable channel by addressing the problems that turned off consumers during e-tailing's first wave of popularity.

By Adam Sarner, Gartner Analyst

The numbers don't tell the real story with business-to-consumer commerce on the Web. Online retailers have done a lot of work behind the scenes to make the Internet a viable channel by addressing the problems that turned off consumers during e-tailing's first wave of popularity.

First, more reasonable expectations exist for Web commerce. Many dot-com companies had boasted that they would put traditional stores out of business. Remember all those Web grocers? Like many of their dot-com peers, most went out of business or were taken over by traditional grocers. They now form the online channel to complement physical supermarkets.

Likewise, e-tailers seldom think of themselves any more as the entire sales channel. However, they're not disappearing altogether. Instead, they form one part of a larger selling strategy.

Second, the Web channel strengthens other channels and makes a multichannel approach more effective. You can buy something online and return it at a store, or browse in a store and make the transaction online. The Web improves the buying process for consumers. When it's done right, retailers benefit from the multiple interactions with customers and potential customers.

See news story:
It's a happy holiday for e-tail sales
Third, retail Web sites have shown an enhanced ability to execute. They're doing a better job of fulfillment and dealing with tricky problems such as merchandise returns. They also are better at delivering on their promises to consumers. For the 2001 holiday shopping season, you won't see as many people complaining that the toys they bought for Christmas didn't show up or that duplicated orders went through. Web retailers have also begun to implement technology that improves their relationships with customers.

Consumers and retailers will rely on the Web as one of many channels that can be used to interact with each other. Accordingly, business-to-consumer companies should view the Web as a mainstream channel--not an experimental or standalone channel--and integrate the Web with physical stores, the call center and catalogs in a comprehensive channel strategy.

(For a related commentary on how better Web usability can boost online sales, see Gartner.com.)

Entire contents, Copyright ? 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.