Wednesday - July 5, 2000

Drugstore.com Named Fittest Online Health Site

Exceptional customer service propels drugstore.com into the No. 1 slot in the Health category of the latest PowerRankings announced last week by Forrester Research, Inc. Forrester PowerRankings combine survey data from online consumers and unbiased shopping tests to provide objective rankings of the leading eCommerce sites. Following drugstore.com are more.com, PlanetRx.com, MotherNature.com, Vitamins.com, VitaminShoppe.com, and HealthCentralRx.com.

"drugstore.com and more.com both offer consumers a wide variety of products and a quick, efficient online shopping experience," said Tom Rhinelander, senior analyst at Forrester Research. "But drugstore.com comes out on top because of its excellent customer service, full-featured Web site, and reliable delivery."

PlanetRx.com trails the leaders but offers consumers many ways to find products, real-time inventory information, and the ability to save multiple health profiles. Fourth place MotherNature.com has an inconsistent shopping experience. For example, it allows customers to track orders online, but its search engine often misses relevant products.

"Except for drugstore.com and more.com, most of the health sites offer a limited product selection, focusing on vitamins and some all-natural products like toothpaste," said Rhinelander. "In addition, most of them also lack features common in top consumer eCommerce sites, like online order history and customer reviews of products."

Vitamins.com is in fifth place. It offers the best shipping price for any US order -- free -- but it is hindered by an unclear return policy and the absence of features like an address book. VitaminShoppe.com has speedy customer service but lacks images for most products and inventory information. Coming in last, HealthCentralRx.com, the sister site of Vitamins.com, offers the shortest return policy and extremely poor customer service.

For the updated PowerRankings, Forrester surveyed 19,000 consumers from Greenfield Online's 400,000-person online panel. These consumers identified the most recent eCommerce sites that they purchased from and rated their experiences. A team of Forrester shoppers then evaluated the shopping experience for sites with a statistically valid number of consumer respondents, performing a series of rigorous tests in six areas. The consumer data and Forrester shopper scores were then synthesized and weighted, with consumer views accounting for two-thirds of the overall PowerRanking. A complete set of PowerRankings results -- both consumer and Forrester shopper data -- are made available to all ranked companies for no charge.

Online Jewelry Sales to Exceed $1 Billion in 2004
Retailers in the online jewelry market have a golden opportunity to seriously increase their revenues. According to IDC, the U.S. market will grow from $77 million in 1999 to over $1 billion in 2004. In fact, IDC believes growth of the online jewelry market will be faster than that of consumer ecommerce as a whole and of Web adoption in the United States in general.

"The market will defy the conventional wisdom that says consumers would want to see and hold fine jewelry before they plunk down large amounts of money," said Jonathan Gaw, a research manager with IDC's Consumer eCommerce Major Purchases program.

Because of this conventional wisdom, the fine jewelry industry has been late to get in on the ecommerce frenzy sweeping the nation, and the market's development is currently one year behind other online markets. However, IDC believes the industry's tardiness will be a major advantage. "Although they face the same challenges with regard to channel conflict and infrastructure development as those confronted by their counterparts in other industries, fine jewelry etailers will be able to apply the lessons of those that came before them to accelerate their learning curve," Gaw said.

Most consumers who purchase fine jewelry online will be experienced ecommerce purchasers and be comfortable with the process. IDC believes this fact could be a double-edged sword for fine jewelry etailers. "Online jewelry consumers will know what a good Internet selling experience is, and they won't tolerate a poor one from an etailer trying to sell a $1,000 item," Gaw said.

Factors contributing to the growth of the online jewelry market include an increasing amount of jewelry stores selling their products online, the lower prices of online goods, improvements in technology that will enhance online viewing, and the no-pressure atmosphere of online buying.

According to IDC, brick-and-mortar fine jewelry retailers who move online will have a significant advantage over brick-and mortars from other industries that moved online. Brand names and the trust they convey will be the reason for the advantage as they carry more weight with fine jewelry purchases than other purchases.

"While most traditional retailers moving into cyberspace pay lip service to a bricks-and-clicks strategy, that tactic does have relevance in the case of fine jewelry," Gaw said. "The high price tags mean that customers will probably always require some hand-holding and assurances during the process, and they will value the security of having a store to which they can return merchandise."

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