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E-TAILER TESTING SEASON

December 30, 1999

      This Christmas season it's finally happened: The first real test for e-tailing.

      This has been the first Christmas in which e-commerce has offered bricks-and-mortar businesses serious competition. The first Christmas where online hype has been replaced by educated consumer intention as user after user chose to buy Christmas gifts via the Net. But it will also prove to be many e-tailers' last Christmas. More than 20 percent of e-tailers failed their first true test, a test to prove to consumers that using the Net's services instead of bricks-and-mortar services is worth the hassle.

      Because, in spite of advertising headlines that claim the Net's advantages - "no waiting in lines," "the biggest selection in the world," "friendly service," and so on - Net service has been less than satisfactory.

      In many cases, the promises of no-wait service have been confounded by downloading time (more than 40 seconds, in some cases, just to get into the home page), delivery problems on popular products, and half-hour waits on the phone to get assistance with user problems. In fact, a recent test by USA Snapshots showed that not one of the world's top-ten most visited e-tailer brands was able to deliver as promised.

      It's been the e-tailers' turn to persuade consumers away from bricks-and-mortar to Net services. But online shopping won't achieve preferred-choice status while basic services, which bricks-and-mortar retailing handles daily, aren't available. It won't take new and hard-won Net customers long to tire of deficient service. Just a couple of bad experiences will steer them back to the conclusion that the traditional way is the easiest way.

      Not only will this lead to a backlash on e-tailing generally, but many new brands will also suffer. Without established brand strength and consumer recognition, infant e-tailing businesses may not have the chance to garner custom if the consumer rejects the online environment. Consumers need to see their perceptions matched by reality. Most e-tailers run on strong VC or IPO marketing money but haven't had the time to establish their backyards. And the fact is that, after Christmas, we might see the first consumer backlash, when the many users who experienced the worst of e-tailing will not give online brands another chance. I guess this leads me to the truism that good brand building isn't just good advertising: It's anticipating and handling consumer expectations and ensuring that what is being delivered is one percent better than what the user expected. Right now, e-tailing is guilty of disappointing its customers by delivering service that is ten percent worse than expected. Christmas 1999 has not only been the festive season, it's been the testing season.

      And the test will sort the professional e-tailers from the e-amateurs.

      Martin Lindstrom is co-author of Brandbuilding on the Internet, a toolkit for Internet marketing professionals.

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