On Dasher, on Dancer, on Prancer and Vixen, on Sale Online, on Time and in Good Condition

The honeymoon is over for online retailing.

This time around, the third year of widespread online selling, consumers are far less likely to tolerate major--or even minor--glitches as a necessary downside of wondrous new technology.

“I think the affair has ended and now we’re back to the traditional relationship between consumers and their retailers,” said David Cooperstein, research director for Forrester Research. “Which means you go to a store you trust, for products you expect, at the price you are willing to pay.”

Returning Web shoppers, now less awed by online shopping than they were the first two years, are likely to be more demanding of service and quality this season.

And though the number of first-time Web buyers could run as high as 14 million in 2000, the newcomers to the online party tend to be far less patient with their computers than the more tech-oriented shopping pioneers.

In fact, unlike the “early adopters” who first bought online, new users this year will look and act more like the average American consumer. As such, these buyers will decide how to shop based on ease and advantage rather than scientific exploration; they also are more likely to choose their merchants based on familiarity rather than a splashy ad campaign.

“There’s going to be less and less patience for slow sites, difficult transactions or poor customer service,” Cooperstein said.

That means far more pressure than last year for Web sellers to present easy-to-use sites, quick responses, clear privacy protections and, perhaps most important, on-time delivery and hassle-free returns.

Toysrus.com already got that message.

Last year, the biggest specialty toy seller was overwhelmed by the sheer number of orders to its online site and tripped into a fulfillment disaster that prevented some orders from arriving before the holidays.

After that public black eye and fines from the Federal Trade Commission, Toysrus.com said in August that it would partner with the country’s dominant online seller, Amazon.com.

With Toysrus in charge of inventory and Amazon essentially acting as a third-party Web host and fulfillment house, the joint venture allows Amazon to continue offering toys without enduring the merchandising headaches that come along with building a new business.

Toysrus.com, on the other hand, offers its parent company’s power to negotiate with manufacturers, while tapping into one of the best Web sites and fulfillment operations in the industry.

Toysrus is the biggest example of what many “old-economy” sellers predicted: Most “dot-coms” and old-time retailers will be unable to go it alone in the new medium.

E-tailing will increasingly have more to do with retailing than with “e,” but the traditional retailers still need some way of keeping the virtual lights on in their new, World Wide Web stores.

“Holiday season 2000 will be the revenge of the brick-and-mortars,” said Sean Kaldor, NetRatings’ vice president of e-commerce. “Offline giants such as Old Navy, Kmart and BestBuy, all of which had little or no Web presence last year, are poised for extraordinary growth during this holiday season. The biggest question is: Will these companies be able to survive the intense infrastructure issues that plagued many companies last year?”

And traditional retailers have even more to lose from disappointing their shoppers.

A failure in security, poor selection, late deliveries and other problems won’t just keep people from coming back to an online store, it could keep them from the real-world stores as well.

The biggest shakeout this year may be watching traditional retailers straddle the line between aggressive marketing and meeting demand.

In the meantime, as investors’ capital dries up, Nasdaq stumbles and many would-be e-tailers find themselves with far less cash on hand, dot-com names are looking more like mall marquees.

Many of the weakest players have dropped out altogether, including cosmetics site Eve.com, Priceline’s WebhouseClub.com, DreamWorks SKG and Imagine Entertainment’s Pop.com, Toysmart.com, discounter Miadora.com and many others so small that many shoppers hadn’t heard of them by the time they closed their virtual doors.

Hundreds of other sites still hanging on with bare-bones staff and dwindling funds could well find themselves on the road to dissolution soon.

As the number of sites shrinks by the minute, so, too, do many of the discounts and specials born of last year’s intense competition.

Last year, when venture capital money was flowing like water and many retailers aimed to capture market share at almost any expense, lucky consumers bought high-tech gadgets and consumer electronics for at or below the retailers’ own cost.

But with spring’s tech stock slide and venture capital lenders’ new focus on “paths to profitability,” consumers are far less likely to find such eager promotions.

And even as the number of Web visitors continues to rise, some financiers raise the question about the long-term potential for online shopping.

Is it a new way to shop that brings with it all new business processes and models? Or is the Web just a better-looking catalog, from which only a limited number of people will ever buy without trying?

Consumers in 2000 will spend far more online than they did last year, though the rate of growth has slowed, according to Jupiter Communications.

Although consumers are expected to spend more than $12 billion online this holiday, a 66% gain from the $7 billion spent online during the holidays last year, that increase compares with a whopping 126% growth rate in online spending from 1998 to 1999.

But the slower growth isn’t necessarily bad, says Ken Cassar of Jupiter Communications, if it allows Web sellers to focus more on turning a profit than generating money-losing sales.

At least a part of the slower online growth probably stems from a steep reduction in advertising and marketing expenditures

Whereas last year, even some of the newest companies rushed to spend tens of millions of dollars on blanketing the airwaves with their names, this year’s holiday television ads are likely to be few and far between, with only the biggest companies making a significant off-line push.

About 55 million Americans, or 20% of the country, will peruse Web stores this holiday season--or 14 million more than last year, according to Nielsen/NetRatings.

For the new shoppers, a trusted brand name is even more important as they test a new way to buy. Privacy and security are also more important concerns to this group, Forrester Research and others have found.

Savvy sellers this year will increasingly address those issues prominently on their sites, reassuring shoppers that they retain control over their credit card numbers and the dissemination of their address and other personal information, said Forrester Research’s Cooperstein.

Some of the concern about privacy probably stems from several well-publicized breaches of security during the last year.

In one instance, shoppers were incensed at reports that Toysmart.com intended to sell its list of customer names when it folded earlier this year. The company later rescinded that offer to hand over clients’ personal information.

Of course privacy is a two-sided issue, Cooperstein said. Consumers like personalized content, such as travel sites launching with a page that features flights from their home city.

That means Web operators, eager for demographic information about their customers, will increasingly reassure shoppers that volunteering information doesn’t mean giving up more than they bargained for.

Also, unlike the more tech-minded customers who previously shopped online, this year’s consumers will place a much higher premium on customer assistance.

Sites with 24-hour live help by telephone--and by instant message, since many new users are unable to talk and surf at the same time--will be best able to turn the new online surfers into online shoppers, Cooperstein said.

Certain kinds of sites will also probably benefit from new users. As increasing numbers of women buy online, the types of stores women patronize will grow along with them.

Toys, for example, will have the biggest growth, according to Nielsen/NetRatings. About 20 million shoppers will head for the virtual toy stores in December, or about 270% more people than last year, Nielsen said.

Last year, EToys captured the biggest share of visitors, with 4 million visitors in November and nearly 4.7 million in December, according to Nielsen/NetRatings.

In contrast, Toysrus.com had 3.5 million visitors in November and 3.4 million in December.

This year, however, the combined Amazon/Toys R Us site might be hard to beat, with both sites’ marketing power, customer base and skills.

Nielsen pegged sales growth of consumer electronics at 109% from last year.

Books, music and video, Nielsen predicted, will be up 65%; apparel will gain by 61% and virtual department stores will see a 51% increase in sales.

Experienced online shoppers--more secure and comfortable with the medium--will still be the biggest spenders this holiday season, with an average of $603 per household, Nielsen estimated.

But in spite of all the boasting about increased numbers of visitors, more users doesn’t necessarily equal more sales.

“It will be the ultimate challenge for e-tailers to turn surfers into spenders as more surfers go online for longer periods of time,” said NetRatings’ Kaldor.

But that might be better left as next year’s battle. The online sellers have more than their share to worry about this holiday season.

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Dot-Gones

A sampling of Web companies that have gone on to the great beyond this year--or are on their way.

(Tabular data not included)

Source: Times research

Researched by NONA YATES