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Go Back to Basics, Forrester Tells U.K. Online Retailers

[London, ENGLAND] In a new report, Forrester Research has said that U.K. online retailers must return to merchandising basics if they are to succeed in an increasingly tough environment.

One of the key factors is the urgent need to reduce range sizes, says Forrester. The huge choice of products enabled by the Internet is confusing to customers, especially to mainstream shoppers who lack product knowledge, the researchers point out.

With the absence of online space constraints merchants have been able to replicate offline concepts such as destination stores and category killers. This is a mistake, according to Forrester analyst Mike Honor.

"This belief ignores the fact that large assortments in one place are less attractive online than off. The concept of a one-stop shop is rooted in the offline world, but the Web is poor for browsing masses of products," said Honor.

By contrast, low online switching costs make the Web a perfect comparison destination -- and it is this aspect of e-commerce that online merchants should be exploiting, Honor added.

The latest observations by Forrester, coming in the midst of a substantial shake-out in the world of e-commerce, will be seen by many as being the product of hindsight. Yet they surely contain plenty of common sense, the lack of which has led to some bizarre attempts by retailers to sell a million and one items to dazed shoppers who frequently "chicken-out" at the checkout.

While saying that the introduction of constructive merchandising tools is essential, Mike Honor points out in the report that as a first step merchants need to understand how to integrate these tools into an easily navigable site.

"Merchants must segment their range, let shoppers choose the way they interact with the category and make needs-focused browsing the default. They must gauge their current level of merchandising and prioritize appropriate improvements," said Honor.

Only after becoming "constructive merchandisers" should retailers even consider expanding their ranges, according to Forrester. The priority is to create a site that can be used by all types of shopper, experienced and inexperienced alike.

Much the same message has recently been expressed by top computer experts at MIT's Laboratory for Computer Science. Director Michael Derouzos has criticized developers for demanding high skill levels from users and failing to create "human-centered computing."