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Why e-Commerce (still) Sucks 20 November 2001 Edition
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While windsurfing the Net this morning I came across this story by Chris Barton over at the NZ Herald Online.

It spells out the sad truth that although there are a handful of online retailers who are getting it right -- the vast majority of e-tail sites are a bit of a dead loss.

So just why aren't people shopping from their keyboards -- after all, it sure beats tramping around a hot, crowded city when it comes time to buy those Christmas prezzies eh?

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You don't have to dig very deep to work out one of the key reasons why people are still beating the street in preference to clicking their keyboard -- and Chris has also spotted it.

There just aren't any bargains on the Web!

Just look at the meteoric growth of "The Warehouse" (where everyone gets a bargain) if you want to see just how much priority people place on the cost of purchase when they go shopping.

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Unfortunately for online retailers, even if you do leverage the lower operating costs of an online presence so as to offer a lower price to your customers -- the addition of packing and postage almost always pushes the total cost of purchase back above normal retail.

E-tailers will often cite "convenience" when extolling the virtues of online shopping -- but this ignores the fact that an awful lot of people seem to really enjoy the act of walking around the mall looking for that special something. I guess it's the "experience" versus the "convenience" -- and the winner, more often than not, remains the act of physically getting out there into the "real world."

The other problem is that even those e-tailers who have a great deal are finding it exceedingly hard to generate foot-traffic.

Unlike the "real world," just building a website is no guarantee that you're going to get people coming through the door. People don't sit at their computer and spend hours typing in near-random domain names such as joeshardware.co.nz, bikes4sale.co.nz, megagifts.co.nz, etc.

To generate virtual foot-traffic you have to create (and maintain) public awareness of your web-store -- and that means two things: good search engine placement and advertising.

Unfortunately, many small retailers seem blissfully unaware that the raft of services or software packages which offer to submit your site to half a trillion different search engines are little more than a waste of money. They don't understand that you're better to pay an expert (as opposed to an "expert") a reasonable amount of money to figure out how you can get good positioning on the top four or five search engines.

After all -- who gives a damn if the US$49 "Mega-turbo-hyper-submit-all" service has you listed on "Jim's Top 100 weblinks" page or on dozens of sparsely populated no-name online business directories that nobody ever visits.

What IS important is that you're highly ranked on Google, Yahoo, AltaVista, Lycos, and maybe a couple of others. These are the search engines that 95% of the people use 95% of the time. "Jim's Top 100 weblinks" probably gets less than a dozen visits a day -- and any money spent being listed there would have been better applied to getting a better ranking elsewhere.

Then there's the advertising option -- more on that tomorrow. Suffice to say that despite being constantly being told that the online ad market is depressed -- the cost of buying banners is still way too high for what you get.

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