O N L I N E

Economic slowdown? Not for e-tailers

March 2002

By Alan Naditz
Business Editor
When the word “recession” first popped up in March 2001, Nettie Duyanovich expected the worst. Instead, the Internet-only pool products dealer says she had a great year.

“Our season more or less begins on March 1 and slacks off in October. But we were full-bore all the way through the Christmas season,” reports Duyanovich, owner of Best Buy Pool Supply (www.bestbuypoolsupply.com). “People were buying everything — liners, cleaners, heaters, pool toys, pools — you name it.”

That’s a far cry from results reported by traditional aboveground-pool retailers, who gave 2001 a so-so rating due to the weakened economy. While many of the land-based dealers tried to spur sales by harping the concept of “fun at home,” their Web-based counterparts tried to keep up with demand.

“It’s a promising market, and the tragic events of 9/11 definitely helped because people did spend more time at home,” says Shaun, the sales manager at All Your Pool Supplies & Products Warehouse (www.wholesalepoolsupplies.com), who declined to give his last name. “We’re hoping more people stay at home this year.”

Internet commerce grew significantly less than expected in 2001, but still at a healthy clip, according to the Commerce Department’s Economics and Statistics Administration. E-commerce totaled $22.5 billion through the end of September 2001, up from $18.4 billion a year earlier — a 22.3 percent increase.

And despite the economic slowdown after Sept. 11, the Commerce Department expects a minimal drop-off once the fourth quarter numbers are tallied in early spring.

Unlike neighborhood businesses, which were confined to a limited business district and subject to that area’s ups and downs, Web retailers were somewhat sheltered from the economic downturn in 2001 because of their worldwide availability, according to Forrester Research, a Cambridge, Mass. research firm that specializes in technology matters.

That goes a long way in the pool and spa business, say industry e-tailers. They note, for example, that times might be bad in Indiana, and the weather might be horrible in Pennsylvania. But orders still will come from places where everything’s going strong, such as California or Florida.

Still, there are surprises. Duyanovich says most of her orders came from the Northeast — particularly New York, Rhode Island and New Jersey — and a good number came after the Sept. 11 terrorist attacks and resulting economic downturn. “I would have thought things would really have cut off, but they ordered like mad,” she says.

Internet stores have several other advantages over “real world” outlets, including the ability for customers to shop 24 hours a day, a lack of pressure on sales and worldwide access, retailers note.

A retailer also can operate a Web site without a staff, and inventory storage isn’t always an issue. Many dealers order product direct from a distributor or manufacturer, which then drop-ships it to the customer.

But there are disadvantages, too, says Duyanovich. Customers often are leery about ordering over the Internet because of extended shipping times — it can take six business days or more to ship a product from California to Florida, for example. And dealing with shipping errors, damaged goods or just being unhappy with a product can be a time-consuming chore for the customer, says Duyanovich.

“That’s one reason we get a lot of looky-looers, who log on to check the price, get an idea of the products available and then go buy it from someone locally,” she notes.

The Web operator also needs to be able to supply customers with quality customer service, even though they’re miles away, says Mark Rusinko, director of merchandising for In The Swim Discount Pool Supplies (www.intheswim.com). “You need a well-trained staff that understands the business,” Rusinko says. “It’s not someone just buying a bottle of shock and leaving the store. People have questions that you need to be prepared to deal with, just like in a ‘real’ store.”





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