Mercata and its competitors bring groups of customers together to negotiate volume discounts. By offering this significant discount, Mercata is educating consumers about its new concept, encouraging trial and providing an opportunity for even greater savings if enough people buy the same item. These deals are simply electronic coupons to encourage trial - and they work if the prices are as good or better than the competition. It's going to cost a lot of companies a lot of money to find out. On the Net, word of e-mail zips around quickly.
Some users go from offer to offer to save on gift shopping.
Perhaps the hope is that some customers will apply these credits to higher ticket purchases or that they will experience great customer service and shop again. Analysts may need to rethink their dire predictions based on potentially overrated fourth-quarter results. We may have to wait until the second or third quarters of 2000 to see which firms survived the price wars and can count the most repeat customers. However, when people receive items that they don't want or need, the ease or difficulty in returning those gifts varies widely between e-retailers. That's where well-executed online return policies can create significant opportunities for smart marketers.