Real-time risks - Multichannel Merchant

Any good business plan includes an analysis of the competition. And in the world of online selling, it’s relatively easy to see how your competitors are doing-especially if they offer real-time inventory functions on their Websites. But most online catalogers agree with Dennis Waldera, vice president of direct marketing at San Jose, CA-based Hello Direct, a telephone accessories catalog, who says, “Offering a higher level of customer access to information is so valuable that it surpasses the competitive risks.”

When ordering from a print catalog, customers must talk with an order-taker to find out if a particular item is in stock. But real-time inventory allows online customers-and competitors-to check the availability of product for themselves and how long backorders will take to deliver. From that information, competitors can essentially determine a cataloger’s best-selling products and even take advantage of product shortages. For instance, if an apparel cataloger that offers real-time inventory on its Website reveals that it’s out of red polo shirts, competitors can gain a selling advantage by e-mailing or targeting customers with a special offer for that same item.

Apparel cataloger/retailer Eddie Bauer seriously debated the decision to include real-time inventory on its Website. “We raised the question of competitive advantage internally and decided not to add the feature at first,” says Judy Neuman, divisional vice president of interactive media for the Redmond, WA-based company.

But the customer service value of real-time inventory finally convinced Eddie Bauer to add the feature when it relaunched the Website in August. “Sure, competitors could capitalize on knowing what items are available and what aren’t, but does anyone really have the time and energy to do this? I don’t think so,” Neuman says. “We know of competitors that offer this feature, but we don’t search their sites. Plus, all business is fair play on the Internet.”

The degree of information Ross-Simons, a jewelry, gifts, and china cataloger/retailer, believes that real-time inventory is no more risky than putting prices in a print catalog and therefore shouldn’t deter online marketers from adding the valuable customer service function. “Yes, real-time inventory is a concern. All information that we place on the Web is a concern,” says Peter Howard, vice president of marketing at the Cranston, RI-based cataloger. But since Ross-Simons’s competitors no doubt receive its print catalog and can already track competitive information such as pricing, “adding real-time inventory shouldn’t be a problem,” he says.

Ross-Simons intends to offer real-time inventory on its site in time for the holiday season. “Real-time inventory is part of our Website’s next phase,” Howard says. “We’ll watch it closely to determine if it’s more of a risk than a benefit. If it turns out to be a risk, then we’ll pull back.”

By contrast, Hello Direct has yet to move forward. Despite Waldera’s conviction that providing the information outweighs the risks, the mailer has made no commitment to real-time inventory. “We have to give additional thought to how much detail we want to give away,” Waldera says. The ultimate compromise, he explains, might be to offer several levels of access. Prospective buyers would get access to one level of information, for example, while corporate customers, using passwords, would be able to see individual account information.

Hang on-help is on the Web Catalogers scrambling to prepare for the Year 2000 (Y2K) computer crisis have a plethora of Internet resources, both general and specific, to turn to for help. Below is a list of Y2K online guides and industry-specific Websites that aim to help companies face the problem head on.

Y2K online guides: www.yahoo.com/Computers_and_Internet/Year_2000_Problem

headlines.yahoo.com/Full_Coverage/Tech/Year_2000_Problem

www.year2000.com

www.itaa.org/year2000.htm

www.itaa.org/y2kadr.htm

www.y2k.com

Industry-specific guides: www.adobe.com/newsfeatures/year2000/