In June, after three years of selling harmonicas on harp-city.com Bob and Barbara Lefkowitz held what may have been the first online going-out-of-business sale. Saying it was too much work, too much time and not enough dough, the Babylon, N.Y., couple abandoned e-commerce, sold their inventory of mouth harps and went back to focusing on their day jobs.
Plenty of bigger companies can probably sympathize. E-commerce is hard, and it's tough to know for sure if it's for you. But with total retail e-commerce sales nearly tripling, from $2.7 billion to $7.9 billion for the 12-month period ending in June, everybody from your broker to the corner grocer to the guy who sold you that recliner you're sitting on is paying attention to the online biz, no matter what the aggravation. And whether they're working for an aggressive Net start-up, a brick-and-mortar retailer who fears getting "Amazon-ed" or a company content for now to dip a toe into the scary world of e-commerce, they're all interested in the future of your wallet. Says Dan Burke, senior analyst at Gomez Advisors, a rater of e-commerce sites: "We're just getting to the really interesting part, where we see who's doing it right and who's doing it wrong."
As an aid in that effort, here's a look at how companies in three industries are faring in the wired economy.
FURNISHING THE FUTURE The toughest online sell: A sofa?
Conventional wisdom is that there are some things people just won't buy online, and one of them is a sofa. "You want to sit on it, feel the fabric, see the color, make yourself comfortable for a while," says John Baugh, senior analyst at Wheat First Union in Richmond, Va. But venture capitalists don't seem to believe it. In six months they have poured $200 million into start-ups with names like Furniture.com and Living.com In July, Ethan Allen, the Danbury, Conn., firm that has furnished upper-middle-class American living rooms for 67 years, decided to buck conventional wisdom and open an online store this fall.
Beside the sofa road-test issue, there are plenty of other reasons why this $40 billion industry might find e-commerce a risky road to take. Online furniture stores face costly returns, deliveries that can't be left to Federal Express and skeptical manufacturers. None of that is news to Andrew Brooks, CEO of Furniture.com Nevertheless, he thinks he can convert customers by making online sofa shopping much better than the showroom variety. Brooks is hoping to win consumers with features such as a program that allows them to click and drag pictures of furniture into a room on the website, to see how it might look at home. "This industry has been driven by the manufacturer's needs," says Brooks. "Online, we can be much more consumer-centric."
That's because every shopper's click provides data, Brooks says. And in the past eight months, he has used that data, along with information from focus groups, to redesign his site five times. Brooks is dubious that a brick-and-mortar retailer can adapt as quickly to consumer needs. "My sense of time is compressed," he says. "For someone who has spent 25 years as a retailer to adopt this speed will be very tough."