Online merchants turning to offline methods of boosting sales

Nov. 6, 2000

 

By JIM BROOKS

In the days when I was a kid -- when computers filled rooms and space flight was mostly science fiction -- one of the signs that the Christmas season was coming was the arrival of the holiday "wish books" from Sears, JC Penney and other retailers.

Every November I would begin my search for the toys I would ask Santa to bring for Christmas. It was serious business, too. On most letters to Santa, I would include the catalog name and page number for the gifts I asked him to bring -- just to make sure he could find them easily, of course.

Thirty years later, some of the nation's online retailers are taking a similar measure.

E-commerce giant Amazon.com will be mailing holiday catalogs this year, its first such mailing.

Toy retailer eToys is also entering the printed catalog business with a 36-page newspaper insert that will be inserted in metropolitan newspapers.

Lucy.com, a women's sports apparel Web site, is also using catalogs to lure new customers and cut marketing costs.

The catalogs allow the retailers to reach customers who they wouldn't reach otherwise -- those who don't own computers, or those who don't feel comfortable buying online.

And those printed catalogs can be used to promote the Web site -- and educate the user.

The eToys.com catalog insert features a section devoted to helping Internet newcomers shop online at the Web site.

After the meltdown among dot-com companies earlier this year, online retailers are seeking ways to reach customers without pricey, top-dollar ad campaigns.

Analysts say the pressure is on for Net retailers to show their ability to make a profit, and for some this holiday could amount to a live-or-die sales season.

ONLINE FRAUD INCREASES. With Christmas approaching, credit card fraud is a concern among the major banks and online retailers.

According to a recent story in the Wall Street Journal, 83 percent of online merchants surveyed said fraud is a problem -- an increase from just one year ago. And these businesses are taking steps to counter what they perceive as a growing threat.

The survey, conducted by CyberSource Corp. and Mindwave Research, polled companies that sell both online and through stores and catalogs.

While online transactions amounted to only 5 percent of the surveyed companies' sales, they accounted for 50 percent of all fraud related to credit cards.

Sixty-one percent of the companies surveyed said they would be taking additional precautions against credit card fraud.

PRICELINE DECLINE. Priceline.com's stock price took a beating recently on news of layoffs and the departure of the company's chief financial officer.

Priceline is cutting 16 percent of its workforce after reporting a loss in recent quarterly financial reports. The company has also issued warnings about fourth-quarter revenues falling short of expectations.

The company recently closed its WebHouse Club, which offered groceries and gasoline using the "name-your-own-price" model.

Analysts say that if Priceline can survive its immediate troubles, its business model should allow it to turn a profit.

As Priceline retools and tries to find profitability, it is courting its old customers with friendly e-mails offering extra savings on airline tickets and rental cars.

Comments and questions about this column may be sent to jbrooks@myoldkentuckyhome.com, or visit www.myoldkentuckyhome.com on the World Wide Web.

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