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Chapter 4. Chapter Understanding the Onl... > What's a Web Merchant to Do?

What's a Web Merchant to Do?

How can you, as a Web merchant, take advantage of all this knowledge? First you must realize how you can use these factors to your advantage. Here are some recommendations based on what we've presented in this chapter:

Build a Customer Base and Keep It with Value-Added Services.

Stores that are able to withstand losses as they spend to grab market share will have an advantage. Audience growth is critically expensive in the start-up phase. Since advertising doesn't guarantee a sale, top sites will use cash cushions to wait out costly advertising campaigns and search engine links as audiences grow to a profitable level. This notion is based on a common Web business model in which sites deem it important to grab the audience first and keep them by offering superior content and user interaction.

Don't Assume that Stores Win on Price

Los Angeles Times technology editor Jonathan Weber summed it up best when he wrote, "Viewing the Web not as a cost-cutting tool but as a way to add unique new service helps explain a lot of what's happening—or not happening—in the online commerce arena these days." What Weber meant was that cutting costs and offering lower prices won't be at the heart of e-commerce success. Instead he, like many consumer behaviorists, argues that the bond a store develops with its customers and via its inventory scope and information will be the key. Price is a factor in a purchase decision, but its importance is often overstated in relation to the Internet. Instead, stores like Amazon.com, Virtual Vineyards, and L.L. Bean have designed online sites and consumer value that aren't focused so much on price as they are many other parts of the store equation.

Inventory Scope is Important

Consumers feel an important aspect of the Web is that it helps them analyze many choices and quickly examine nearly complete selections of the products they want to buy. Stores that offer a subset of a product type may lose out to stores that push inventory availability to the maximum. The best way to maximize inventory availability is to have partnerships streamlined to manufacturers and distributors. This way you can offer a larger selection of items that aren't necessarily in stock. Incidentally, it is situations like these that infer that middle men and distributors will not just fade away, as many predict.

Focus on Category-Killer Markets

In order to focus informational offerings and inventory, many stores simply try to solve one specific subject area of shopping while avoiding others. The reason is that users respond to the depth of a site's expertise and information, not the breadth.

Avoid Items Requiring High Experiential Exposure

Experiential buying will never be overtaken by mail order or Web-based stores because some things are just better shopped for in person. If you plan to compete in an area that has a high experiential need, you will need to increase the information available in order to offset the desire of the consumer to shop traditionally.

Navigation and "Browsability" Are Critical

As shown by concerns found in recent GVU surveys and other research, the need to have an easy-to-navigate site is a paramount concern of Web consumers. Since many consumers search heavily on the Web when making a shopping decision, anything that impedes this process forces them to go elsewhere or develop poor perceptions of the retailer. In some cases, poor navigation and site design can destroy or prevent development of the trust that merchants must achieve before a consumer will do business with them. Thus you should create easy-to-read price lists, make it easy to find items (this is more than just adding a search engine), and test your capacity to serve your site out to the public (sites might work fine initially but buckle under large groups of simultaneous users).

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