How To Be A Smarter Online Shopper
by Jean Sherman ChatzkyHow to be a smarter online shopper Shopping on the Web is fast, convenient and occasionally cheap -- but you have to know where to look to find real deals
(Editor's note: Jean is looking for a couple in the Washington, D.C. area who sometimes fight about money and are willing to visit a well-known and reputable counselor for help. This is for a story, so the session would have to be on the record. If you're interested, drop her an email -- along with some details of your situation -- at Money_Online@moneymail.com)
If you've ever bought anything online, or even just browsed through one of the many Internet shopping sites, you're in good company. Last year, 19.7 million Americans visited retail web sites from their homes. And sales are booming. Shoppers spent a total of just $707 million online in 1996 but nearly four times as much -- some $2.7 billion -- last year. This holiday season, we'll drop something like $3.5 billion online in the fourth quarter alone, and a yearly total of $7.8 billion. And that's only a taste of what's to come. By 2002, according to an LJR Redbook Research report, so-called e-commerce could generate some $34 billion or more in annual sales.
What's going on? The analysts at Jupiter Communications call this a healthy upward spiral. There are finally enough consumers on the Web to lure even the giant old-line merchants -- places like Macy's and Nordstrom's -- to put their inventories online.
As for the shoppers, Jupiter says they are young, affluent and well educated, with a median age of 33 and an average household income of $59,000. More are single than married. Some 57 percent have college degrees. And in the unlikely event that you are not yet among them, you will be: within the next decade, analysts expect that shopping through "e-tailers" will be as common as a walk in the mall.
That's because electronic commerce has some undeniable merits. There's a global, worldwide selection, for example. You can find your way to merchandise that hasn't yet made it into the deluge of mail-order catalogs in your mailbox. You can shop at any hour of the day or night. And you don't have to deal with salespeople or crowds.
Internet shopping also has drawbacks. It can be more time consuming than a trip to the store -- or even than waiting for a catalog customer service rep on the phone. Some items have limited availability. Although you may think you're getting a discount, once you add in shipping costs chances are you'll just break even. Finally, while 54 percent of American businesses have a web page (Simmons Market Research Bureau), some items haven't made it to the web -- and some look better on the screen than they feel in person. Here are some guidelines on what the web is good for, and what it's not so good for.
Price.
You'd think that because Web stores don't have to pay for office space or clerks, their prices would be lower. It's just not so. Many manufacturers won't let cybermerchants undercut their traditional resellers -- and those merchants with a retail presence in addition to an online presence don't want to undersell themselves. And then there's the matter of shipping costs, as I found with the walk-and-talk Elmo we bought for our daughter. I am one of those people who hate toy stores at the holidays, so shopping at eToys (www.etoys.com) was a pleasure. But with shipping, this Elmo came to more than $37 even with the midrange (3- to 5-day) delivery option. At Toys 'R Us, it would have cost just $29.99. What I liked about the transaction was that it was easy -- and the eToys site told me that Elmo had won an award from Parents magazine, something the real toystore might have omitted.
Tools.
Because it's interactive, Web shopping offers certain features that catalogs and stores can't match. For example, you can listen to clips from a CD you're thinking of buying -- something you can't do at all in print, and which you can do only by queuing up for the kiosk at a high-tech music store. Other sites have added what they call shopping aids. If you're looking for a squall jacket from Lands' End (www.landsend.com), for example, you can tell the computer about your metabolism, your activity level and the length of time you usually spend outdoors. It'll give you an idea of which jacket would be best for you. At the Baby Gap site (www.babygap.com), you can tell the computer you're looking for a gift for a baby boy and how much you want to spend, and get back suggestions for gift sets. The analysts at Jupiter call this "directed" gift selling, and predict it will be huge.
Convenience.
There are two kinds of shoppers: those who are price sensitive, and those who are not. For those who are willing to pay a little extra for convenience, the Web is terrific. Check out www.netgrocer.com, for example, where we bought four boxes of Cheerios for less than $10 and they threw in a free taco dinner with our order. My guess is that national sites aren't going to win the country over when it comes to shopping for staples, though. The best alternative right now, both for consumers and merchants, are local services like Streamline.com (www.streamline.com). This Boston-based service not only delivers your groceries but also picks up and delivers dry cleaning, film and recyclables. It even gives you a refrigerator in your garage so that you don't have to be home to receive deliveries. The charge: $30 a month, but customers say they make up the difference because they don't do impulse shopping in the store. (Analysts believe the breakthrough in this area may come from drugstores, by the way; imagine being able to order toothpaste and shampoo along with your prescriptions.)
Availability.
Web auction sites offer access to many goods that it are hard to find in stores. Winebid.com (www.winebid.com) for example, consistently auctions off bottles of wine that are not produced in huge quantities -- including some Napa county favorites from Colgin, Bryant Family and Turley. You pay for them, yes, but at least you can get them. EBay (www.ebay.com), the largest person-to-person auction site on the web, sells everything from antique quilts to used computer parts to Beanie Babies. It's been profitable practically from the get go -- helping to explain the phenomenal success of its recent initial public stock offering.
The Web also offers a wide array of sports equipment. Those Kangoo Jumps that are being touted as the next hot fitness item (you strap them on like in-line skates, but use them for jumping instead of blading) aren't in stores yet, but you can see -- and buy -- them at www.kangoojumps.net. And at www.fromages.com, you'll find unpasteurized French cheese that can't be sold U.S. stores. They can offer it on the net only because they ship it out in a single day.
Gimmicks.
Practically everyone has heard of Priceline (www.priceline.com) by now. That's the service that lets you name your own price for airfares and, admittedly, it sounds great. But Priceline, too, has limitations. First, you have to be willing to travel at any time during the day (though not the night) and make one stop. And you have to commit to that with your credit card before you know exactly what you're buying. That's pretty tough when you're moving an entire family with kids. I went to the site intending to buy tickets for my family vacation in February, but didn't pull the trigger because flying with two kids under four is enough work. I was willing to pay extra to be sure that I could schedule flights around naptimes and meals. The other thing about services like this is that you have to do your homework. If you name a price that's too high because you haven't shopped around, then you lose out.
Finally, a word about the biggest concern people have regarding Internet shopping: security. Consumers say their number one worry is giving their credit card number online. In actuality, Internet experts say, they haven't heard of problems where you might expect them -- with someone catching your number and using it to buy merchandise. The card companies say it's much more common for something altogether to happen: namely, for an unscrupulous person to order items using his or her own card, get the merchandise shipped to some other address, and then protest the charge. VISA and Mastercard are seeking a technological fix for abuse. In the meantime, if you feel comfortable handing your card to waiters in restaurants or giving it to telephone operators over the phone, you're probably just as safe on the Web.
November 22, 1998
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