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Timely test for e-tailing take-up

IF Internet-based retailing companies can’t turn a profit this Christmas they never will.

With the weaker players out of the market and customers more confident about buying online, those in the industry believe the time is ripe for business-to-consumer e-commerce sites to cash in on the busy Christmas retail period.

A recent AC Nielsen/Net Ratings report found shopping online is steadily increasing in the lead up to Christmas. In the last two weeks of November, 1.8 million Australians bought goods online, compared with 1.48 million in the last two weeks of October.

“This year is really going to make or break it for a lot of e-tailing sites,” dotdashslash managing director Stuart Downie said.

“If they can’t make money this year, when the weaker players are out of the market and the existing companies have a reputation for delivering on time, if they can’t make it in this environment I don’t think they ever will.”

According to Mr Downie, e-tailers that want to “make it” will need to concentrate on the fulfilment part of the e-commerce process, rather than an attractive website.

“In terms of the technology, the sophistication still isn’t there. But on the fulfilment side, e-tailers have certainly put their systems in place to be able to deliver the products,” he said.

“The players in the market that had long delivery times have been culled. Particularly those that missed deadlines are no longer around. Those e-tailers that remain can fulfil their orders and they have made the whole online e-commerce experience quite good for customers.”

Mr Downie said that while the e-commerce applications within the websites hadn’t changed significantly since the dot.com boom three years ago, traders had improved their delivery and billing processes.

“When the tech boom was going on the money was there for development. But now the level of advancement isn’t that great anymore. The efforts these days have been concentrating on fulfilment,” he said.

The biggest change in the online landscape since the boom is the customer.

“It’s less scary now. People have friends or family who have bought goods online and they haven’t had a bad experience,” Mr Downie said.

“They’ve also become more educated about the credit card process as well. Giving out your credit card details online is the same as giving your credit card to a waiter at a restaurant and he walks off and does the billing away from where you are.”

He also said the popularity of Internet banking had made people more confident in making transactions online and the security of e-commerce systems.

So what are Australians buying as gifts for Christmas? Commerce Australia consultant Simon Williams said wine and CDs tended to be the most popular online purchases.

“Consumables like wine and CDs are always going to be popular purchases over the Net because they are not such an emotional purchase,” Mr Williams said.

“Customers usually know what type of wine or CD they are after.”

When it came to more expensive gifts, Mr Williams said consumers tended to use the Internet as another way to research products and compare prices.

“I think what you’re going to find is that people use the Internet as a research tool, to get information about a product. If the information is presented well then naturally the customer will go to that retailer,” he said.

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