Just an Online Minute... Will E-Tailers Disappear?

by Dec 12, 2000, 12:00 AM
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As if we haven't had our fair share of bad news lately, findings from a new e-shopping study predict 75% of Internet pure-plays won't be around in 2001, according to analysts at Performance Research Associates, who believe the dot-com kill-off will accelerate as soon as the holiday shopping season is over.

The online holiday shopping season seems to be moving along splendidly, nearly half of this year's holiday shoppers doing it for the first time. Of these 'newbies', a third are choosing where they shop by brand name and whether they have a brick-n-mortar presence.

Hence, "A lot of dot-coms are hoping against hope this will be the holiday season that puts them on the road to profitability. Instead, it will probably be the one that buries them," says Ron Zemke, an analyst with Performance Research Associates.

Researchers base their estimates on a just-completed survey of 659 Net shoppers, which found only 56% of those shoppers were completely satisfied with their purchasing experience online.

"With the cost of acquisition running between $50 and $150 per customer, a dot-com just can't afford to have someone come to the site, make one purchase and never show up again," says another analyst, Tom Connellan. "You need customers to do two things - come back frequently and recommend the site to others. The only way that happens is with customers who are completely satisfied."

What a concept!

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