BUSINESSWEEK ONLINE : DECEMBER 11, 2000 ISSUE
BUSINESS WEEK E.BIZ -- CLICKS & MISSES A Mixed Bag for E-Xmas MySimon loses some luster, but Amazon.com shines Christmas in my family comes with its own traditions and lore, which my six siblings and I have relayed to leery new spouses in the odd wedding toast. One of the best stories is the one about my brother storming down the stairs on Christmas Eve in the 1970s demanding to know who stole his $2, because without it he couldn't buy presents. Poor us. So one can imagine how I took to Web business models that promised consumers more leverage, especially during the holidays. Tricks such as shopping bots that seek out the lowest price on the Web, and sites where groups of buyers can team up to get group-buying discounts on popular goods promised Christmases even brother Pat could afford! But when I looked at some of them last year, I found mixed results. And when I looked again this year, expecting things to be better, I found mixed results again. Some of the Web models I expected to force big price cuts have done little. And many sites still don't tell you enough about the products they sell. Here's how three big sites with different approaches stacked up as I worked through a shopping list that was part real and part hypothetical. Mercata (www.mercata.com) Most perplexing is Mercata.com, the group buying site backed by Microsoft co-founder Paul Allen. The idea behind Mercata is to limit selection somewhat so the group's buying power can be concentrated. Last year I figured all the site needed was time and maturity to become a major force, but selection is still poor and prices are often high. Here's how it works: You register for a PowerBuy, which is basically a sign-up period of several days in which you tell Mercata what you'll pay for the goods you bid on. A few days later, you see how you fared. The group's size determines the price--Mercata doesn't explain the details--and everyone whose bid is equal to or higher than the final price gets the lower group price in the end. If you bid $120 for a Razor scooter and a big group pushes the price to $99, you pay $99. Selection and scanty product information are two big problems that undercut Mercata's price proposition. A search for carry-on luggage yielded three choices, and only 10 TVs were available, even though electronics is Mercata's strong suit. Product info is skimpier than at major bot sites, let alone the wonderfully merchandised Amazon.com Inc. And Mercata doesn't consistently command better prices than you can find on the Web--or even at the Wiz. With only about 400,000 monthly visitors (outside of holiday time), the power that group buying is supposed to afford just isn't there. Disappointment with Mercata's prices was nearly constant. Bots mySimon and Dealtime trounced Mercata's price when it came to a Palm VIIx. In PCs, Mercata wanted more than $1,300 for a Compaq system running on a 633MHz Intel Celeron chip. I found more powerful PCs on Compaq's (CPQ) own Web site for less. Mercata's luggage prices could be matched--for a bigger bag in the same brand--at eBags.com, and so on. The only best-of-the-Web price on Mercata was for a Movado watch. Over the course of a week most prices moved only a few dollars lower as more people bid. Plus, bidders must wait for the end of the PowerBuy to know what the price is going to be--let alone to get their stuff. No bargain, that. mySimon.com (www.mysimon.com) MySimon is the leading bot site on the Web. It does what it's supposed to do: deliver price comparisons, and a bit more. But it has regressed in some ways since I reviewed it last year. In particular, its data about products isn't as deep or as easy to use as it once was. The reason is sad but simple: In 1999, mySimon tapped a lot of that info by partnering with Productopia.com, a for-profit twist on Consumer Reports that closed in October. The loss of Productopia is a big one. The site let you research dozens of categories and see recommendations. If you wanted a digital camera, you could choose between its picks, the best value models, and so on--then let mySimon find the best price on the camera you chose. The system worked wonderfully: I chose a digital camera by relying on Productopia and mySimon, beating Wal-Mart's (WMT) price by $30. This year, however, mySimon has user-written reviews and general buying guides, which are mostly lists of staff-recommended gifts. The best info comes from questionnaires that help match you to different products, but links to these questionnaires are so small that I didn't initially notice them. They are no match for the detailed comparisons Productopia complemented with lively writing. But mySimon's price still beats both Amazon and Mercata 8 or 9 times out of 10. The site certainly has its points. One strength: mySimon addresses concerns that a cheap price from a no-name store might prove a bad bargain. It does that by listing prices next to a store's reliability rating from Gomez Advisors Inc. Amazon (www.amazon.com) After hard-core bot shopping, Amazon.com (AMZN) seems positively traditional. Like offline stores, Amazon offers selective discounts to get your attention but sells most goods at full price or close to it. What sets it apart is what the full price pays for--lots of product info, sharp merchandising, recommendations, and a sense of fun. Considering it was Amazon, I began with a book for my other older brother, a big-shot economist. Dealtime.com delivered BUSINESS WEEK economics editor Michael J. Mandel's new book, The Coming Internet Depression, for just $13.44, well below Amazon's $19.20. But Amazon made up the difference in other ways--especially with well-written reviews of Mandel's book, some from magazines and others from readers who had absorbed the book and commented thoughtfully on it. Amazon is not that complete outside of books and music, but it's unexpectedly detailed considering the wide range of products it sells. Its merchandising dangles fun things in front of you to induce impulse buys. My favorite: Checking Amazon's prices on Razor scooters, I found its list of Top 10 Corporate Goof-Off Gifts. The $29 Wiffle-ball pitching machine, perfect for long straight office hallways, sounded like a must. The development of all these models highlights that the Web has room for the new and the old. Most of us overestimated the importance of dynamic pricing, from Mercata to priceline.com (PCLN). But it does have a place. Other people value the frills Amazon offers more than rock-bottom prices. The market needs a mix. And this holiday season, for all of this year's problems, it still has one. By TIMOTHY J. MULLANEY, tim_mullaney@ebiz.businessweek.com _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					e.biz Contents for Dec. 11, 2000 issue RELATED ITEMS A Mixed Bag for E-Xmas GRAPHIC: The Bot Is Still the Best INTERACT E-Mail to Business Week Online

Copyright 2000-2009, by The McGraw-Hill Companies Inc. All rights reserved. Terms of Use   Privacy Notice