Holiday E-Shopping May Disappoint

Pie-in-the-sky online shopping predictions for the holiday season may be glittering the Internet landscape this holiday season, but E-tailers may be in for an unpleasant surprise, said analysts.

Chicago-based consulting firm Diamond Technology Partners Inc., based here, said many Internet resellers could learn a tough lesson during the holiday rush: Relying on the Internet may end up being less efficient than mall stores and bricks-and-mortar merchants.

A pure Internet strategy runs the risk associated with fulfilling orders and handling returns, said Sandeep Chugani, a partner at Diamond Technologies.

"Online shoppers can miss out on the benefits of assessing and comparing choices firsthand before making a purchase," Chugani said. "And after making an online purchase, initiating a return or getting [an] after-sale purchase can be a problem."

Diamond Technologies said a failure to fill orders before Christmas could lead to customer backlash and the demise of E-retailers that cannot live up to promises. The company also predicts traditional retailers will launch aggressive in-store programs to guide in-store visitors to their Web sites.

Fears that online merchants will lack inventory or will not deliver product on time will lead 51 percent of online holiday shoppers to spend less than 10 percent of their budgets online, according to Jupiter Communications Inc., an Internet research company in New York. Those who do turn to the Web are gravitating to companies and brands they know and trust, Jupiter said.

However, established merchants should not rest on their laurels, said Ken Cassar, an analyst at Jupiter's Digital Commerce Strategies practice.

"Their greatest challenge is living up to the expectations that consumers have toward their brands," Cassar said. Online merchants should not employ the same price-driven tactics that have worked in the past, he said.

"This is all about what you do once you get the person to the site," said Glenda Dorchak, chief executive of online superstore Value America Inc., Charlottesville, Va.

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