The 2010/09/02 at 11:37
Gilles Nectoux is CEO of Plebicom which operates eBuyClub, an Internet buyers’ club.
Commerce International: What is the problem facing vendor web sites?
Gilles Nectoux: “A huge majority of visitors buy nothing when they visit an online store. Transformation rates oscillate between 1 and 8 %. What’s more, it remains hard to maintain the loyalty of cybernauts who make orders, for they don’t hesitate to leave one store to benefit from a better price elsewhere. At least 75% of purchasers resort to price comparison web sites.”
What is the impact?
G.N.: “Vendors in turn use these price comparison web sites to keep watch on the competition and to continually adjust their own prices. All this in real time! Given the price war, it is difficult to reach profitability for web sites positioned on easily comparable products. Vendors are thus looking for economic models. The largest have created e-market places. Amazon was one of the first to set up competition for itself by welcoming other vendors. Next, large retailing portals (Pixmania, PriceMinister, RueDuCommerce and FNAC), rushed to fill in this gap. They said that if they were less well positioned than their rivals, they could nevertheless promote sales for their competitors and thus earn commissions. Online vendors are changing both their mindsets and their economic models.”
What do you mean by this?
G.N.: “First: they sell the same thing and, at the same time, they bring in business for ranges that they did not previously deal in. In this way, RueDu- Commerce, specialised in IT and electronic, began selling fashion and beauty items of small suppliers. Second: the cybernaut purchases from the vendor and the latter urges the former to register on the eBuyclub cash-back system: the cybernaut then earns money after a certain number of purchases. This is motivation for registering on eBuyclub and purchasing from the same vendor.”
What does the vendor gain if all its rivals are on the cash-back site?
G.N.: “Thanks to a cash-back web site, when an FNAC client makes a purchase from Amazon, FNAC indirectly brings business to Amazon and earns a commission. This system monetizes the visitor of FNAC and increases its value. In short, your client can bring money to your competitor and this will make your richer! We have set up this type of system for over 50 online vendors.”
How can this economic model be exported?
G.N.: “Any vendor is likely to be interested by the monetization of its visitors or by the bringing in of business. What needs to be done is to set up a cash-back gallery in every targeted country. Next, the online vendor only has to connect its web site to our cash-back service.”