On-Line Mice Aren’t Stirring : Cyber Shopping Lacks Appeal of Trip to Mall
When buying things for himself, Rob Lingelbach is a cutting-edge consumer who would rather head for his computer than the mall. The technically adept Lingelbach can order his choices from a computer screen in a flash.
But when it comes to buying gifts, not even Lingelbach shops from the on-line shopping services. Instead, the computer-savvy Angeleno becomes the old-fashioned mall maven who wants a shopping experience that is touchy-feely and filled with scents.
“I have a specific product in mind when I shop for myself,” Lingelbach explained. “But I browse when I’m looking for a gift, and it’s easier to browse in a store because you can see and touch the product.” On the computer, he notes, “you can’t use your nose to shop for cologne.”
This is hardly the sort of customer the on-line shopping services have in mind at this time of year as they scramble to become players in the holiday retailing sweepstakes. And Lingelbach is the rule, not the exception.
Confronted with limits even devotees acknowledge andplagued by the coolness of the all-important female shopper, on-line retailing has proven a disappointment.
Though it has evolved from a novelty in the early 1980s to a retail alternative that offers products from hundreds of major store chains and catalogue operators, computer shopping remains a distant also-ran to its prime competitors: mail-order catalogues and television shopping networks.
While computer-based retailing is expected to generate a paltry $136 million in sales this year, cataloguers will take in a whopping $40 billion, industry analysts say. And TV shopping channels such as QVC and Home Shopping Network will realize more than $2 billion.
Of course, television retailers and catalogue operators can’t offer consumers the feel, touch and scent of products, either. But they succeed largely because they get the attention and holiday season dollars of women. On the other hand, only about 14% of on-line shoppers are women, industry analysts say.
“On-line shoppers are primarily men who have a lot of experience with computers on the job,” said Ethel Klein, publisher of EDK Associates, which specializes in market research on female consumers. “On-line shopping is not very user-friendly to women because they have less experience with computers. That situation is changing because young girls are getting early exposure to computers.”
But on-line retailers have also had difficulty attracting those who already use computer services. Only 25% of those subscribing to cyber services such as Prodigy, America Online and CompuServe shop in the virtual malls those companies provide, according to some industry estimates. More of those companies’ subscribers use the electronic mail feature or other menu items available on line.
Undaunted by the disappointing response to past appeals, on-line services are now responding with bolder marketing and new products designed to make computer-assisted shopping more interactive and interesting.
Among the new products are electronic “catalogues” on CD-ROM, which offer clearer color images of merchandise than those found on traditional on-line services. Some of these disks also offer stereo sound and faster product-search capability.
2Market, a computer-based shopping service launched this month, is among the entrants to this brave newer world of retailing. The company offers a single CD-ROM containing thousands of brand-name products from more than two dozen retailers, for a subscription price of $19.95. The 2Market disk features such big retailing names as Spiegel, Sharper Image and Nature Company. It also includes software programming that comes up with gift ideas when the shopper provides criteria such as a cost range and the age, gender and special interests of the recipient.
But some analysts are dubious whether many shoppers--accustomed to no-cost browsing in stores and in the dozens of catalogues that come in the mail--are prepared to pay money for a catalogue of catalogues on a disk.
“A subscription price for the disk is ludicrous,” said Joshua Harris, president of New York-based Jupiter Interactive Productions Inc., an on-line consulting company. “Can you imagine the Beverly Center charging an admission price?”
Many retailers are also cautious about the immediate prospects. Lands’ End, the big catalogue merchandiser, has been on line on Prodigy and CompuServe for two years. Lands’ End opted for space on the new 2Market product because it--like other retailers on the CD-ROM--was given the opportunity to design its own presentation.
“What we’ve seen on line is very primitive, and the presentation is very flat,” said Michael Atkin, vice president of marketing at Lands’ End. “We’re involved because we want to find out if people want to shop this way.”
But 2Market’s founders--Apple Computer Inc. and America Online--argue that CD-ROM technology’s superior graphics will help overcome the drawbacks to cyber shopping that have so far overwhelmed its advantages of convenience.
“In the 1980s, shoppers expressed a big need for convenience, and consumers want even more of it in the 1990s because they have even less free time,” said Thomas Burt, chief operating officer of 2Market. 2Market’s marketing studies indicate that its potential customer base is a time-conscious upscale household in which each spouse works, generating a combined average income of about $75,000. Of course, 2Market is aiming at households with computers--and that market is growing steadily. An estimated 37 million U.S. households have computers, and about 10 million of those computers have the CD-ROM drive needed to generate interactive pictures and sound from a disk. There should be computers in at least 40 million homes by 1995--and 17 million will have CD-ROM technology, according to industry projections.
Other companies are also exploring this retailing frontier. Contentware Inc. in White Plains, N.Y., produces a CD-ROM that carries catalogue items from retailers such as J.C. Penney, Spiegel and Marshall Field. The Canadian firm Magellan recently introduced CD-ROM-based shopping software called the Merchant. And CompuServe, one of the on-line services giants, last summer introduced a CD-ROM that includes Brooks Bros. and 11 other merchandisers.
“On-line retailing is still in its early stages, and some retailers have been disappointed with the results,” said Lorraine Sileo, an industry analyst at Simba Information, a market research firm in Wilton, Conn. “But CD-ROM-based shopping is an attractive alternative to traditional on-line shopping, and it’s part of the effort to find the right formula.”
Meanwhile, in cyberspace just as in real malls, the last-minute holiday fever is at a high pitch. Just this week, CompuServe is rushing out a special holiday disk. And its Electronic Mall, with more than 130 merchants, is pushing discounted merchandise and featuring contests to lure customers.
One of CompuServe’s electronic merchants--a company called the Gift Sender--is sponsoring a “We Believe in Fruitcake” contest in which shoppers are asked to describe ways to make use of a fruitcake without eating it.
