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How Colorado retailers turn the info highway into an info buy-way.
In the competitive, take-no-prisoners world of retailing, how could you resist the allure of the Internet?
*You gain instant access to a burgeoning market of more than 38 million American adults, double that of a year ago, according to New York technology firm Find/SVP.
*Half of those households boast annual incomes greater than $50,000.
*These Worldwide Web-surfers were responsible for $15 billion of electronic commerce last year, according to Forrester Research, Cambridge, Mass. That's expected to increase 13-fold in three years.
And profit margins? According to a recent study by Hoskyns, a computer services group, while traditional retailers struggle to hold on to 6 percent operating margins, "virtual" retailers could enjoy margins around 18 percent.
"Where do I sign up?" you ask.
"Not so fast," caution many experts.
The numbers are deceiving.
Only 4 percent of web commerce is retail-related, and that figure isn't expected to increase. Fewer than one-third of current web users make purchases on-line, and most are for computer equipment or software.
"Most of the firms that have tried to sell over the Internet haven't made any money," says Dr. Michael Hayes, professor emeritus of marketing at the University of Colorado. "There are exceptions, of course, but the fact is most people on the Internet come to look. Few come to buy."
"Less than 25 percent of web sites achieve their goals," says Troy Eid, chief operating officer of Denver's Infotest International. Eid should know. Infotest, an alliance of leading corporations, universities and research centers, measures how effectively web sites contribute to a company's business objectives.
Yet Eid, Hayes, and other Colorado experts insist the Internet can be a powerful channel for retailers to market to existing customers and...