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Monday, November 27, 2000

Online Toy Stores Fail to Provide Consumer Protection

Clicksure, an independent global e-confidence business, announced the results of its best practice review of selected popular US online toy stores. Clicksure reviewed the Websites during the last week in October in anticipation for the holiday season and produced worrying findings in the area of online privacy.

"Despite recent publicity about the lack of protection for consumers at online toy stores, our snapshot review of some of the largest sites show that few online toy retailers have stepped up to meet best practice," said Steve Delcarson, Chief Operating Officer for Clicksure North America. "Consumers should be made aware of the potential personal and privacy protection gaps of shopping online this holiday season. Our online review found similar gaps in quality to those recently highlighted by the FTC. The FTC has found that some holiday web sites make promises for quick delivery that cannot be met. As businesses work to back up these claims, Clicksure provides a means for highlighting and correcting gaps in quality online."

While the review found most companies posted a privacy policy, nearly 50 percent did so in an area that was not easily accessible during the purchase. Of the most popular toy companies reviewed, 70 percent did not identify the personal information that was being collected by the web site. As protecting consumers' personal surfing information becomes part of the national debate, Clicksure found that 30 percent did not provide users with a clear statement about the company's use of cookies. In fact, a fifth of the web sites reviewed did not state the specific purpose for which the collected personal information would be used.

Clicksure's review also found that the online toy stores fail to give consumers a voice in responding to the company, where 80 percent did not provide an opportunity for consumers to file complaints about the products or web site.

"Our Discovery Snapshots are rigorous assessments of e-businesses with the goal of making the consumer feel safe while making their online transaction," Delcarson said. "At Clicksure, we provide the tools and resources for e-businesses to create confidence in their online business," continued Delcarson. "Consumers who see the Clicksure Mark on a web site can feel confident that the e-business has a quality program in place to make their experience superior."


The B2C Model Will Fail Without Profitable Delivery
AMR Research, Inc., a leading industry and market analysis firm specializing in e-business strategy and infrastructure, estimates that a total of $60-70 Billion of goods will be shipped through home delivery channels by the end of this year. While a wide range of delivery services are available to merchants, the crucial issue is not how products are shipped but what is shipped. Order fulfillment is the critical link and the last impression between a merchant and a customer, ensuring customer satisfaction and brand loyalty.

"In order to be profitable companies need to offer enough products with high delivery margins," said Chris Newton, senior analyst, Supply Chain Strategies. "Yet in order to be competitive, companies also need to offer a mix of products that may include some lower margin items attracting a broader audience to their site."

Home Delivery Battle
Companies rely on home delivery as an integral part of their Business-to- Consumer (B2C) e-commerce strategy. Both brick-and-mortar retailers and pure play Internet startups realize that successful home delivery is critical to achieving customer loyalty, leading to profitability. AMR Research's Report on Supply Chain Management recommends suggestions for merchants to make home delivery a win-win situation for both merchants and consumers:

- Offering a product line that can be profitably delivered through a home delivery channel should be top priority, since it is hard to recoup costs on heavy, low-margin items if customers are unwilling to pay for shipping.

- Marketing alone should not drive a company's home delivery strategy. Efforts need to involve the IT, finance, marketing, customer service, and logistics departments to ensure that profitability and customer goals are in alignment.

- Delivery partners should be chosen carefully, taking into account their ability to provide predictable and reliable service. The delivery partners should represent and complement the shippers' brand image at the time of delivery.

- Free shipping is a privilege not a consumer right. Merchants should make sure that only their best customers, who order frequently and place high dollar value on orders, earn free shipping.

AMR Research's Report on Supply Chain Management concludes that the types of products a merchant chooses to offer through a home delivery channel will ultimately determine how successful they will be in the B2C space. Not all products should go through a home delivery channel. While most merchants are focused on the how of home delivery, they fail to take into account the what. AMR Research's report offers recommendations to address the problems merchants are facing today.