The Internet, the next retailing frontier - 'Retailing on the Internet' conference

Discount Store News, Dec 4, 1995 by Dawn Wilensky

NEW YORK - Surfs up on the information superhighway, and many of today's leading companies are diving in - as illustrated by attendees and speakers at the "Retailing on the Interet" conference sponsored here last month by Discount Store News and MasterCard.

Wal-mart was among a host of companies to tout the business opportunities of the Internet and confirm the important impact the technology will have on the future of retailing.

Robert Davis, strategy manager for advanced technology at Wal-Mart Stores, projected that Internet retail sales will be $16 billion in the year 2000. "If there's money to be made there, we'll make our share," he said.

Davis also noted that little market share would shift from discount stores to Internet sites. Rather, catalog retailers will see the drain as electronic retailing costs continue to make print catalogs relatively more costly.

These and other opinions were delivered before a gathering of more than 250 industry executives, who listened to a day-long program of presentations that examined the advantages and the pitfalls of the emerging information superhighway. In addition, several companies provided demonstrations of their Web sites and gave attendees a glimpse into the many services being offered.

Among the sessions was a panel discussion called "Cyber Retailers: The New Playing Field." The panelists were Sandy Goldman, president of ShoppersVision Express; Elaine Rubin, vp, Village; Donna Iucolano, manager, interactive services, 800- FLOWERS; and Pete Baltaxe, director, operations at 2Market.

"In order to be a leader in electronic shopping, you have to focus on the consumer and develop leading-edge technology," advised Baltaxe. If people find your site easy to shop and a fun place to be, they will spend more time there and consequently, spend more money."

According to a special report by Discount Store News, on-line users, on average, spend approximately 20 hours per month on the Internet and use that time to browse, find entertainment, information and buy products (usually gifts).

An increasing number of consumers are drawn to these kinds of electronic shopping malls as opposed to brick-and-mortar storefronts for their ease of use and the convenience of not having to leave their homes or offices when making a purchase.

Keith Arnold, manager of Compuserve Electronic Mall; Ed Sanden, vp, interactive service, CUC International; and David Ris, senior manager, business development, Marketplace MCI stressed the importance of retailers establishing a Web site that offers a host of goods and services during a roundtable discussion called "Who's On Line: The Malls of Tomorrow."

Wal-Mart's World Wide Web site while mainly informational, does offer executive gifts including 100 skus of products like fruit baskets and steaks.

Like Davis, Burlington Coat Factory manager of store systems

Percy Young said that the main use of its site until now has been as a test bed to determine the most cost-effective ways to use new media to serve customers. In one transactional loop, BCF customers can print out on-line coupons for 10% off items they purchase in stores.

800-FLOWERS is more aggressive and is already doing 10% of its $200 million in annual sales through online services and has more than 15 electronic partners, according to Iucolano.

The florist and gift company got onto the Internet because "it provides a new channel to reach new and existing customers in a cost-effective way to build brand awareness, [serving as] a customer retention tool and a two-way communication tool," lucolano said.

Some of the problems with the technology include security. Tom Pouliot, director, electronic commerce, MasterCard, was on hand to discuss the ways in which the credit card company is trying to secure card numbers and prevent data pilferage, spoofing (masquerading as someone else to obtain a credit card number) and alteration of data. The company is also developing an electronic signature system that will help eliminate fraudulent use of credit card number over the Internet.

Attorney Neal Friedman of Pepper & Corazzini likened the Internet today to the wild West, calling it a wide open frontier" for commercial and legal issues. Little precedent exists for many common aspects of business as they are practiced in cyberspace. He said that these include copyright and trademark infringement, ownership of material, dependability of service, desirability of a service contract based on flat fees vs. per inquiry or percentage of sales and ownership of customer lists.

A copy of the DSN special report is available for $399 by calling (813) 664-6737.