Barty’s Weblog

The only surprising thing about Telecom’s decision today to pull the pin on Ferrit is how long it took.

Telecom blames the current “retail environment” for the failure, yet this isn’t reflected in our own experience. Since relaunching in September, Mighty Ape has broken all sorts of records over the last two month and our January sales are tracking well up on last year (up over 45% so far).

And I’m sure Mighty Ape isn’t the only local web site enjoying success over the Christmas period. So with Ferrit,  maybe something other than the “environment” has gone wrong. The business model perhaps? The web site?

I’d suggest the following as the reasons Ferrit failed to deliver (in no particular order):

The web site failed – the web site while “pretty” on the outside, did not present the content well, nor did it work as a comparison site. The difficulty Ferrit faced was that all the retailers had their own product data, so price comparisons where merely a bunch of (sometimes random) search results. Then there was the old stuff presented as new… cold presented as hot …  a lot of basic mistakes that retailers wouldn’t make, if they were choosing which products to feature in their own stores.

Weekly content fails – Ferrit lacked good sticky content — there was no reason to come back tomorrow or the day after. The front page was changed once a week and the category pages are changed less often. Sites like Trademe are very sticky — i.e. it’s worth visiting often. I still remember pricing mistakes with some of our products on the front page of Ferrit… and we literally had to wait a week for the next site update to get the prices fixed. We were incredulous at the time.

The combination of a poor web site and stale content meant that Ferrit had to heavily advertise to get traffic to their web site — people did not come back of their own free will.

Business model – then there was the business model. The infrastructure needed to support a web site like Ferrit is substantial and when coupled with the very low commission model, it was always going to be very difficult to break even. To make matters worse, New Zealand is small, so they had to penetrate the market very well to just break-even. I’d suspect that the maths were pretty basic for Telecom in the end.

Overall, I think the main reason that Ferrit failed was that it just wasn’t very useful. People didn’t really need it.

We were retailers on Ferrit up until September 2008, at which point we decided that we didn’t need to compete with our own web site. I remember the last sale we participated in, we heavily discounted music… and Real Groovy discounted games. That typified the problem for retailers. Why bother to help something grow so others can compete with you? For us it was purely a business decision.

Speaking of which, I believe a pretty sensible economic decision has been made… finally.

I do have to say that in our dealings with Ferrit, while we’ve had to deal with some pretty “awkward” systems (being awfully polite), the people have always been great! We’d like to pass on our best wishes to all of Ferrits staff…

Last week we got an email from Ferrit inviting us to a Ferrit breakfast presentation about the eTail08 Conference held in California in February. The presentation included summaries from two e-tailers that had attended the conference along with Ferrit.

Now, GPstore has supported Ferrit from day-one, and speaking from experience (two Netguide awards for best online store etc) we’d much rather see Ferrit investing their sizable budget on fixing their web site — that advice is free, no need to send me on an all-expenses-paid overseas trip!

I’ve been thinking (again). Is online shopping really more impersonal than buying from a retail store? Is it? No really? Do you need to be face-to-face with someone… to get a personal experience? (Dangerous question that one.)

Anyway, I don’t think so. Just because you are not physically in our store, that doesn’t mean we don’t interact with you. In fact, I think customer interaction is an advantage for e-commerce stores over retail stores and here’s why….

E-commerce stores get to interact with customers more often than retail stores do.

While retail stores generally only interact at the point of sale, we interact through-out the whole sales process. From start to finish. We email our customer their order details, we send them updates on any ETA changes with their orders, we answer their private messages, and emails…. and we still get to talk to them on the phone.

We’re also very easy to contact. Our customers let us know then they have big issues, but more importantly when they have small ones. This helps us to help them, before the small stuff gets big… and well before they decide to shop somewhere else (heaven forbid!). Do retail stores have such a luxury? Do retail stores know their customers as well as we know ours? Even though we rarely get to meet them?

Back to the original question: Do you need to be face-to-face with someone… to get a personal experience? I’d love to hear your thoughts…