Dot-coms fail service test as retailers fight back

Established retailers are starting to overtake ebusinesses because they are learning the lessons of the internet faster than dot-coms are learning the rules of traditional business.

This finding was made by management consultancy PricewaterhouseCoopers (PwC) as it unveiled a European-wide survey contrasting the attitudes of traditional firms and dot-coms to the web. It found traditional retailers and B2B suppliers were fast appreciating how the internet opens up additional revenue opportunities, while dot-coms were still failing to recognise the importance of after-sales customer service. Robin Tye, UK ebusiness partner at PwC, said dot-coms still consider customer fulfilment the least important factor of their immediate success, showing they had not learnt from the recent fall out of dot-com start-ups. He said "We still have dot-coms coming to us with business plans with no fulfilment strategy, planning to outsource it. Unlike bricks and mortar firms, they don't realise how difficult the fulfilment side is. For dot-coms with no established brand, if a customer's first experience isn't satisfactory he's not going to go back." The results of the survey show only 15 per cent of internet start-ups seeing fulfilment as vital to their success, compared to 31 per cent of bricks and mortar companies. This is despite wide-ranging criticism of the sector in recent months for placing too much emphasis on marketing and not enough on traditional business basics. Jo Mosaku, a director at fashion e-tailer Zoom.co.uk - a joint venture between clothing group Arcadia and Associated Newspapers - said: "Many pure play dot-coms didn't do their homework. There was a frenzy in the marketplace, in which hard commercial realism never seemed to play a part." Alan Buckle, CEO of KPMG Consulting, disagreed: " Some dot-coms - for example Amazon - provide unrivalled customer fulfilment, and are far more focused on their customers than many traditional businesses. At an immature stage in their development it is natural for firms to be more focused on making a name for themselves and building market share." PwC's survey found that 65 per cent of respondents thought clicks and mortar companies would triumph over web start-ups in the long run. In the UK, respondents were even more pessimistic about the success of dot-coms with over three-quarters believing they would fail to prevail.