E-Commerce Commission Press Kit

CHAPTER FIVE:RETAIL SALE OF TANGIBLE GOODSIn addition to goods and services that can be delivered electronically, the Internet is also used tosell physical goods. Increasing demands on leisure time and the improvement of overnight andsecond-day delivery services that spurred the growth of catalog shopping in the 1980s and 1990sare now leading people to shop over the Internet.A fall/winter 1997 CommerceNet/Nielsen study found that 10 million Web users in the U.S. andCanada (about 16 percent of all Internet users in North America) have actually purchasedsomething on the Web, up from 7.4 million six months earlier. A much larger number use theWeb to shop, but they still close the transaction over the telephone or at a store. 85Internet consumers report that they shop on the Web because of convenience, ease of researchand good prices. 86 Where most Internet shoppers bought computer software and hardware a yearago, today’s shoppers buy more mainstream items. America Online (AOL), the largest InternetService Provider with 11 million customers, reported a shift in online buying patterns during the1997 holiday season. Apparel climbed to the top spot, and books, to third place this year. Alsopopular were food, flowers, music and toys. 87Internet retailers pursue a variety of strategies to attract customers. Just as one would find intraditional retailing, specialty retailers, large discounters and malls/marketplaces have their placesonline. Internet consumers may also visit online auction houses or use a “personal agent” to helpwith their shopping.Most Internet stores try to make online shopping as familiar and as easy as possible. Physicalproducts arranged on store shelves are replaced with electronic catalogs that include photographs,detailed product descriptions, pricing and size information. Third-party reviews may be availableto assist the buyer in choosing between different brands or models. When ready to make apurchase, the customer clicks on the product and puts it into a virtual “shopping cart,” and maycontinue shopping or proceed directly to check out. First-time customers enter basic name andaddress information, along with a credit card, hit the enter key on the computer, and thetransaction is completed. Recognizing that customers may want to speak with a companyrepresentative directly in some instances, many Internet retail sites offer toll-free customer servicenumbers.Just as traditional bookstores feature tables of bestsellers and gift books, and organize racks ofbooks by subject area, Internet bookstores also provide guides through their vast virtual selection.For those who know the title or the author of the book, a keyword search scans the entireinventory in a matter of moments, retrieves the title, along with a brief description and review ofthe book, and a button to add it to the customer’s shopping cart. Visitors may also browse for a35