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Advantages/Disadvantages of PurePlay Internet Retail

Advantages: Convenience of shopping on-line with increasingly secure technologies safeguarding Internet transactions, e.g. on June 27th Visa International announced that more than 60 of the world's top Internet solutions providers combined to launch its "Visa Authenticated Payment". This will enhance the security of Internet-based payments on a global scale. This provides Visa and the consumer the same level of security in the virtual world as they have in the physical world. Pure play doesn't have the challenges and risks associated with balancing their resources between traditional media and the on-line channel; pure plays are able to invest more in their on-line storefronts than brick-and-mortar companies are able to do. While established brand names do attract traffic, it is a positive shopping experience that brings the customer back. Consumers are finding that their shopping experience on-line is more convenient, there is greater ease of making price comparisons and gaining information about products and services. With Internet retailing there is a good selection of products and services.

For the Internet retailers, there is reduced unit operating and customer acquisition costs; it is a low cost medium.

Disadvantages: Pure plays usually don't have the advantage of established brand names and customer bases; they have to start from ground zero. While brick-and-mortar companies are immediately able to serve their existing customers on-line and, synchronistically, focus on acquiring new customers, pure plays do not have the advantage of an established brand name, customer base, and an inventory system, but must devote their resources and time to building a brand name and customer base.

Pure plays are occasionally beset with costly e-mail viruses, and must be ever-vigilant against spammers. Security and technical problems sometimes have to be dealt with; they must retrain for the Internet sales format, must learn how to use an e-mail dialogue with customers, starting slowly and, because customer trust of the pure play retailer is often lacking, they must gradually build the customers' trust.

Some retailers consider the Internet technology to be too expensive, too difficult to use, of little value, or intrusive. Many consumers believe that ads and cookies invade their privacy. Many consumers hesitate to shop from a pure play retailer because they cannot try or feel an item before purchasing nor, in the case of clothing, try it on. Many find it inconvenient to return purchased goods if they are not satisfactory and a large percentage are not comfortable using a credit card online and disclosing their personal information. Customer service is often lacking, as well as proper delivery of goods.

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References: http://www.internetretailer.com/contents.asp (6/29/01) 12:40PM
Love, Jack Shakeout in a Healthy Market. Available on-line: http://www.internetretailer.com/pressReleaseDetail.asp?id=4331 (6/29/01). 1:15PM
Wagner, Mary K.I.S.S. Keep It Simple for the Shopper. Available on-line: http://www.internetretailer.com/article.asp?id=402, (6/2001) 1:22PM
http://www.pagecatcher.com/aimNews/A014.html, (6/29/2001) 1:30PM http://www.internetretailer.com

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