E-Tail Holiday Survival

When my son screws up at home or at school, he always asks for “one more chance.” It’s a natural instinct. I did it myself at his age. So did most of you. Sometimes it even works.

A lot of e-tailers have looked a lot like whiny children most of this year, at least to investors. Companies such as eToys, Webvan and buy.com all sport stock charts that look like the relief map of my vacation trip from the Sierras to Death Valley. (Don’t click the links above unless you want to feel sick.)

So, for those investor-parents who were indulgent enough (or undisciplined enough) to let e-tailers survive until today, this is the “one more chance” those web stores have been begging for. Of course, it will be no easier for them to behave than it is for the average child.

For one thing, while investors may have abandoned the e-tailing sector, consumers have not. Last week saw a spectacular “rushing to the rail” problem for Webvan, in San Francisco, which still hasn’t figured out how it has to change to survive.

Creating memberships to bring in money, giving those members preferential delivery times, and merchandising better on high-margin gifts should have been obvious strategies. When push comes to shove at any small business, you know the proprietor gives preference to the best, most loyal customers. Why can’t Webvan?

Amazon.com has a different set of problems. It angered its regular customers by changing its privacy policy. Having failed with its dot-com diversification effort, the company is compounding the problem by jumping into bed with the most clueless of the real-world retailers. With little cash available for new ads, Amazon.com needs forgiveness, not from its investors, but from its best customers. The question is whether it will get it.

Even companies that execute perfectly can find themselves in big trouble, The Washington Post reports. If your web hosting company, or your web builder, or any of your other “confederates” in business is having trouble, you’re having trouble, and there may be little you can do about it.

But you need to hear the good news, too.

While the worlds of business and politics may be as unforgiving as an assistant principal, the trends still favor e-tailers. Media Metrix reports that the time spent online was up 61 percent between September 1999 and September 2000. Nielsen//NetRatings reports that e-tailers’ traffic rose 12 percent during the second week of November, with the toy and apparel categories leading the way. This is exactly what happened a year ago, said Sean Kaldor, vice president of e-commerce at NetRatings.

The season may have started late, but it is starting. Those sites that manage to execute on fulfillment and customer service, thereby satisfying their clients, guarantee themselves many Merry Christmases to come.

So why are you wasting time reading this column? Now is the time for all good men (and women) to come to the aid of their web store.

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