Small companies can't afford the high cost of building and marketing a competitive e-commerce site, she says, and they have little chance of finding a mass market on the Web. Although a lot of local merchants are going online, they generate only 9 percent of Internet sales, compared with 50 percent offline, reports Cambridge, Mass.-based Forrester. What's more, the market research firm predicts that small retailers' online share will shrink to 6 percent by 2003, with the rest of the traffic going to national retailers. To succeed on the Web, small merchants must become service companies, says Neal Polachek, senior VP with the Kelsey Group, a Princeton, N.J., research firm that tracks local commerce and advertising. Small firms need to get to know their customers so they can anticipate future needs and offer services that big online retailers can't provide.
Small businesses have the edge here because most services are provided locally.
For instance, Tennessee law prohibits Nashville's Village Wines from selling wine over the Internet, but owner Hoyt Hill still attracts local wine lovers to his small shop through services he offers on his Web site. Privacy Policy Stock data provided by Stockpoint and its data suppliers.