Retailers Debate Pulling Plug on E-Commerce

Feb 19, 2002

Traditional retailers could start to pull the plugs on their e-commerce sites during the coming year — or at the very least, re-evaluate and scale back investments in their online operations, according to some electronic retailing executives and experts at this week’s eTail 2002 event, as reported by They said the harsh economy is forcing many retailers to take a harder look at their Internet commerce operations, which were expensive to launch and can be costly to maintain. For most retailers, sales generated from Web sites still represent a small fraction of their overall sales.

Dyan Triffo, a financial analyst at Deutsche Bank Alex. Brown in San Francisco, said retailers are currently facing tremendous pressure to focus on their bottom lines. A storefront or Yellow Pages-type presence may be adequate for some retailers. Others, however, may be faced with tough choices because their customers have grown to expect transaction-based sites. Brian Kilcourse, CIO at Longs Drug Stores in Walnut Creek, California, adds that retailers need to keep in mind that e-commerce sites are intended to build their brand, not only to generate sales.

Moderator Comment: Does retailing make business sense online?

One of the major mistakes that e-tailers have made is
that they have failed to identify the value (sales) of consumers. Consequently,
many (most actually) have spent more trying to bring customers in than the customer
will ever spend online.

Despite the numerous failures, we believe that B2C e-commerce
will eventually be a requirement for virtually all retail brands. The question
is when? [George
Anderson – Moderator

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