New ways to shop the web
By Ronald Rosenberg, Globe Staff
For those already enmeshed in the World Wide Web of on-line shopping, the three main forms of e-commerce are as familiar as Pokemons and Furbys.
First is traditional retailing, practiced by such huge e-tailers as Amazon.com and eToys.com: You want an item, like a book or a toy, you go to a Web site, buy it, and they ship it to you.
Then came on-line auctions: You want an item, you go to an auction site, bid on it, and cross your fingers that you'll have the highest bid by the time the auction ends. (Or keep checking back and outbid the highest bidder in the 5 seconds before the auction ends.
Lately, the hot way to buy on line is name-your-own-price. Post on the site what you'd be willing to pay for an airline ticket or hotel room, and see if an airline or hotel is willing to sell to you for that price. But as fast as these styles of buying developed, variations on the themes are also coming fast and furiously.
The scramble is expected to propel e-commerce revenues from $32 billion this year to $500 billion by 2002, according to International Data Corp., a Framingham market research firm.
''A lot of people are trying to reach a large number of people and hope to be the killer electronic commerce application,'' says Michael Goulde, executive vice president at the Patria Seybold Group in Boston, a technology consulting firm. ''In the end, the winner will be the site with the highest customer value - familiarity, ease of use, meets specific needs, easy to do business.''
Here's a rundown of the new models of e-commerce, coming soon to a PC near you.
Un-traditional retailing
There's strength in numbers: Get lower prices by joining with other shoppers who want the same item and aggregating your collective purchasing power. Mercata.com sells hard goods such as home audio and video equipment, tools, and health and fitness equipment priced below standard retail prices.
The final price fluctuates based on the number of buyers who agree to buy the same item within a specific time, usually several days. Thus, a DVD player that retails for $400 could drop to $330 if say, 500 people agree to order it at the same time. (On the site, the company does not disclose how many other people are trying to buy the same item as you.)
Last week, Mercata offered a 32-inch Philips television with picture-in-picture for $799, but by the end of the week, the TV sold for $734.48, with free shipping.
Some Internet retailers are peddling unique services, such as a day at a health spa.
Send.com, best known for its wine-ordering service, has branched out to offering a day of golf at courses around the country. So a pair of duffers can buy a round of golf at the Dunes Golf and Beach Club in Myrtle Beach, S.C., with a golf cart and practice balls for $399.
For shoppers who hate filling out order forms and credit card information at every site, there are shopping destinations and virtual bazaars with access to a collection of on-line retailers who agree to a single payment for everything purchased.
Recently, Lycos started LYCOShop (www.lycos.com) with more than 1,000 on-line stores, including Barnes & Noble, The Sharper Image, Crate & Barrel, and Neiman Marcus, integrated with on-line auctions and classifieds. After a one-time registration, buyers can pick the products they want from the various retailers, put them into a single shopping cart, and pay for it all with one credit card transaction.
Similarly, Snaz.com offers multiple retail sites via a universal shopping cart for Land's End, eToys, CDNow, Pets.com, Godiva, Buy.com and MarthaStewart.com, also using a single password.
Still ahead are easier ways to pay for purchases using ''electronic wallets,'' software that stores and manages personal data and makes it unnecessary to retype credit-card numbers and addresses every time you buy something. Whenever you come to an order form that has to be filled out, you activate your wallet and it fills out the form for you.
One firm, Brodia Inc. of San Francisco (www.brodia.com), plans to offer e-wallets that can handle multiple credit card numbers and addresses and let consumers store their receipts. The company - one of eight in the field - also plans to offer banking, grocery ordering, and multiple forms of payment.
To speed up your computer's understanding of each purchase, new software is being tested that can ''tag'' products as content and index them. Current systems extensively describe items, but do not identify products by their content.
Reverse auctions
There are personal referral service sites that bring together buyers looking for an item or service and sellers who can fulfill the request.
IWant.com allows individuals to anonymously state what they want - vacations, stereo equipment, theater tickets, computers, etc. - including a description and price, and let sellers who have those items find them.
Buyers and sellers communicate by posting e-mail messages. If they make a deal, they exchange phone numbers and mailing addresses and arrange for payment.
To build traffic, the service is free for now. But starting early next year, sellers will be charged anywhere from 25 cents to $10 for each would-be buyer they contact, according to Shabbir Dahod, the company's chief executive. (In contrast, eBay charges sellers $2 to $50 per listing, depending on the item.)
Even information has a price in the on-line world.
Several Web sites field questions and answers in an auction format. Exp.com (formerly advoco.com), links users seeking advice or services in such categories as finance, education, parenting, careers, and pets with its database of 2,000 authorities. If you want some information or a service, you consult a specific adviser, or throw your question out to all advisers.
You'll receive an initial response that describes the information or service available. If you accept it, negotiate a price with the adviser, get the info or service, and then receive an on-line invoice. Exp.com handles the billing and takes a percentage.
Taking a more open approach is InfoRocket.com, which debuts this month, by letting anyone post a question and the amount they are willing to pay for the answer. Responders reply by stating their qualifications to answer the question. If both parties agree, the answer is sent to the questioner, who pays only if he or she is satisifed with the answer.
Questions might range from advice on buying a handheld device to step-by-step guidance on tuning a guitar. This travel question was listed on the site: ''I am running with the bulls of Pamplona next month. Can someone please recommend three inexpensive hotels within walking distance of the site? Please tell me ... how dangerous the experience is. I would also like two recommendations of fiction authors who have written about the experience.''
A potentially huge new arena is business-to-business auctions, where buyers and sellers can establish long-term relationships and where items carry big price tags.
AdAuction.com brings buyers and sellers of television, print, radio, outdoor, and Internet advertising space together and hosts real-time auctions on the Web. The appeal is to bargain-hunting media buyers who can bid for what they want without having to spend time negotiating with sales representatives from each media outlet.
Similarly, FastParts.com operates a trading market for overstocked electronic parts, matching buyers to sellers in an on-line auction. Considered a neutral marketplace, buyers get market-driven prices that are lower than those of traditional brokers, while sellers get higher prices than they normally could, with FastParts earning up to 8 percent in commissions.
Two sites, eWork Exchange (eWork.com) and FreeAgent.com, are aimed at self-employed professionals who compete with one another for short-term jobs by posting information on their skills, fees, and promised delivery dates in an on-line auction. Employers can even rate their performance.
Name your banana
Bidding on established time-sensitive services such as airline tickets and hotel space, where prices can fluctuate based on demand and availability, is catching on. Now the site that started it all, priceline.com, is adding price-bidding on home mortages, cars, and even groceries.
Microsoft's expedia.com, a travel service that the software giant plans to spin out as a separate company, has started offering a ''hotel price matcher'' for users who want to name their own price for rooms. But Priceline has filed suit, charging Microsoft with patent infringement.
''There are still other models, particularly in business-to-business, where intermediaries will bring fragmented buyers and sellers together - people who don't take sides, but provide a needed service,'' says Thomas R. Eisenmann, an assistant professor at Harvard Business School who instructs students about Internet businesses.
Still on the horizon are some very local business models that combine the Internet and cash. Imagine the neighborhood kids organizing themselves to set up regular, weekend auctions on line for such basic jobs as raking leaves, mowing lawns, shoveling snow, and babysitting - with their own families outbidding each other.
Ron Rosenberg covers business and technology for the Globe. His e-mail address at the newspaper is rosenberg@globe.com.