Who Will Sink or Swim This Holiday Season?

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In today's volatile economic climate where venture capitalists are no longer throwing millions of dollars at entrepreneurs who are drafting their business plans on the back of cocktail napkins, which e-tailers will be left standing and which will go to that digital domain in the sky?

Here are my predictions of which top e-tailers will go the distance and which may not live to see Christmas 2002. Please note that I am not looking into how much money these e-tailers have in the kitty as I present my preferred (and least favorite) sites. This list is highly personal, based on my own experience as a high-volume online shopper of products and services, and as a marketing communications professional.

Clever marketing and sales promotions may drive me to an e-tailer, but ease of ordering, breadth of product selection combined with product information, competitive prices, customer support, on-time delivery, accurate order tracking and reasonable (or free) shipping and handling charges are what keep me loyal. Based on these criteria, here are my picks:

E-Tail Winners

· Amazon.com. Although some stockholders who bought Amazon at a high love to predict its demise, I vote Amazon.com as the No. 1 e-tailer. As a loyal customer since its launch in 1995, I have seen the site get better and better every month. While Amazon has moved beyond the book universe and now offers everything from electronics to compact discs, DVDs and toys, it still successfully kept its core principles of outstanding customer service intact. The interface is intuitive and fast-loading. Prices are competitive. Selection is comprehensive. Amazon.com is a winner for the ages.

· RedEnvelope. RedEnvelope offers an array of gifts suitable for business, friendship or family. I once ordered an assortment of cookies for my mother's birthday. My mother never received them. We traced the order, and it appeared someone other than my mother signed for them. I wrote to RedEnvelope, and a new batch of cookies was promptly dispensed. The hunt is still on for the cookie thief. Nice touches abound such as including a personalized message from the gift giver in a red envelope with each gift. The gift search, gift reminder, express gifts (guaranteed overnight delivery), online customer service, multiple addressing and an inventory system are all killer apps. The general visibility is lower than it should be, however. I think a program of heightened media relations and online marketing would help RedEnvelope become more of a household name.

· Babystyle. While baby e-tailers are dropping like flies, I predict that babystyle just might still be here to greet the new batch of babies in 2002. Whether you are shopping for baby shower gifts for an officemate or a new mom overwhelmed by the complexity of furnishing a nursery, babystyle offers a wide mix of affordable and stylish products. Babystyle recently decided to add Cindy Crawford to its board and use her as a spokeswoman. I have since found babystyle's prices to be much more competitive than what I find in Manhattan retail stores. They are lacking product recall information -- something every baby e-tailer should include -- even on products never carried on the site; safe babies are in everyone's best interests.

· Netgrocer. The online grocery field is littered with dead soldiers. The margins are slim and the competition's brutal. I will wager that Netgrocer, the only digital national grocer in the game, stays the distance. Netgrocer frequently rewards customers with incentives to shop, with no shipping and handling fees with some minimum order requirements. Netgrocer also struck a deal with FedEx that offers delivery at a low cost. You cannot buy perishables here, but it is a good place to stock up must-haves from diapers to cereal.

· Expedia, Travelocity and biztravel.com. There is no doubt that the travel business is forever changed and enhanced by online travel sites. Unable to pick a favorite, Expedia, Travelocity and biztravel.com are outstanding travel sites that will be here for years to come. These online travel retailers' ability to tap into the latest cutting-edge technology such as sending alerts to personal digital assistants and pagers if a plane is delayed is a level of customer service satisfaction simply not experienced by the physical travel agency world.

E-Tail Losers

All of the above sites understand, like it or not, that the customer is always right. Customer service is the e-tailer's top marketing tool, as a scorned customer can create a flurry of negative word-of-mouth online that has a life of its own.

· Priceline.com. The customer is apparently never right at Priceline.com. While the site promises to find the absolute best prices for your airline travel, mortgage or hotel stays, the company does not deliver. Dazzled by the concept, I have tried Priceline several times. Most recently I booked a luxury hotel room in New York City at a Marriott Hotel on Wall Street. I went to that hotel's Web site and learned that I could have booked a room for $30 cheaper if I went directly to its site. I alerted Priceline that I wanted a refund, and the company staunchly refused to grant one. It consistently claimed it was the best possible price "that day," which was false. While my credit card company later granted me a refund, Priceline's inability to provide a custom response was tiresome. I received five identical e-mails from customer service that provided virtually no help. I also sought mortgage financing at Priceline. The financing Priceline offered me was a full point above what I was able to secure at LendingTree.com. With customer service like this, no amount of advertising or public relations can rescue the brand.

· Oshmans.com A full eight months after I received exercise equipment from Oshmans.com, I received an e-mail stating that I had not been charged enough shipping and handling. Eight months after I paid my bill, Oshman's had the audacity to charge my credit card $50 to cover the extra cost. I e-mailed my outrage over the poor accounting systems and customer service. The company essentially said "too bad." While their brick-and-mortar stores are successful for consumers, Oshman's definitely needs some work on the clicks end.

· 1-800-Flowers.com. While the site looks great, is easy to navigate and offers great all-around functionality, the products received almost always seem to pale compared with the Web photographs. Flowers arrive wilted and paltry-looking. Festive gift baskets, which appear overflowing and lavish on the Web site, look cheap in person. As 1-800-Flowers takes a cut of the action, it leaves less on the table for the vendors that are actually creating the displays and baskets. Hence, quality suffers. Save some money -- open the local Yellow Pages and order your bouquets from the town you want the delivery in.


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