Big retailers ride ups and downs on Net

Big retailers ride ups and downs on Net

Tales of online retail successes and failures have been filling the US business press over recent weeks.

Business Week trotted out retail's Old Reliable example of an aggressive and successful transition from bricks to clicks - clothing company By the mag's estimate, the site raked in $US80 to $100 million for the first nine months of the calendar year, a four- to five-fold jump from 1998.

Yet Business Week did find some fresh information to advance the commonly held, but rarely proven, belief that some combination of online and retail stores may appeal more to consumers than purely electronic operations. For example, one tech consultant said that over 50 per cent of shoppers who buy through both methods spend more than when they shop only at stores.

In other words, e-commerce works better in conjunction with storefronts, especially when those stores boast a powerful brand name.

A recent CNET story focused on the flip side, highlighting some of the more prominent botch jobs on the Net by major retailers including Wal-Mart and Toys 'R' Us.

'The reasons for the bumbles vary, but in many cases they can be traced to a common denominator: underestimating the difficulty of building a strong online presence,' the article said.

The story then pointed out how publicly listed retailers get punished for Net-related losses. It seems their investors maintain an expectation of profitability, a quaint notion to which Web-only merchants are immune.

As for Wal-Mart, its delayed site relaunch gets the once-over from a Bloomberg wire report. The press has been drooling over any scrap of information on the company's new and improved site, a closely guarded secret that many thought would debut before the holidays but which is now set for January 1.

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