Big Guys Rule E-Commerce Roost

Ann All

The Internet was supposed to level the playing ground for small businesses hoping to compete against retail giants. But it largely hasn't turned out that way. While a Web site can work wonders for an SMB selling fairly unique goods or services, it won't do much for those selling more common items.


The largest e-tailers got the highest scores in ForeSee Results' annual online holiday shopping survey . Giant Amazon led the pack, scoring 87 on ForeSee's 100-point index, according to a Dallas Morning News article. The scores are based on price, merchandise, functionality of the site and product content.


The 40 companies in the survey, which run the U.S. Web sites with the most sales, averaged a satisfaction score of 79 on the index, an improvement over a score of 74 in both 2008 and 2007. As in the real world, bigger companies can compete more aggressively on price, which ForeSee CEO Larry Freed said is important to consumers. Economies of scale also allow them to invest in more sophisticated Web site technology. In a similar ForeSee survey of 110 online retailers of all sizes, overall satisfaction dropped to a 73, compared with a 75 in 2008 and a 77 in 2007, reports The Wall Street Journal. The smallest companies suffered the largest losses.


Online sales numbers from comScore show a similar trend. From the beginning of November through Dec. 20, online retail sales reached $25.5 billion, up 4 percent from 2008, although lower than in 2007. Sales among the top 25 retailers grew 13 percent in November, while sales at small and midsize retailers dropped 10 percent.


The Dallas Morning News article quotes Freed:


Generally, what we are seeing is that larger retailers are getting better and stronger while the rest of the pack is struggling.


Scores for 11 e-tailers topped 80, which Freed said is generally considered the "excellent" range. Several companies scored at least 10 percent higher than a year ago, including Macys.com (79), Gap.com (76) and Overstock.com (76). Macy's added buying guides, product reviews, product videos and other new features.


Satisfied customers should pay off in increased sales. According to ForeSee, highly satisfied shoppers are 61 percent more likely to buy from the retailer again and 70 percent more likely to recommend a site to their friends.


The e-commerce bar continues to rise, with mobile applications shaping up as the next big thing in online shopping. As IT Business Edge's Mike Vizard wrote last month:


With more smartphones that can more easily browse Web sites will come a new generation of impulse buying. Instead of waiting to buy goods and services until they can get in front of a robust personal computer, more people will buy things based on an alert from a social network, using their iPhone, Palm Pre or BlackBerry.

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