A little while ago, I went shopping on the Web for a heated cat bed. You may think it’s silly, but the veterinarian recommended the device for my geriatric, arthritic cat.
I couldn’t find the bed in any of the brick-and-mortar pet stores. I guess a heated cat bed is a pretty specialized item most consumers aren’t willing to spend money on.
It may be more profitable for brick-and-mortar retailers to fill their store shelves with items that have a faster turn-over time than a heated cat bed. But I still wanted to spoil this cat who’s been with me all of my adult life.
The Web, however, is a perfect place to sell something as specialized as a heated cat bed. Of course, all the major dot-com pet stores carried the device. After checking out the prices on Petopia.com and Pets.com, I went with the one that offered the bed for $20 less: Pets.com.
A couple of hours after I placed the order, Pets.com announced that it was going out of business. I tried not to take it personally.
Pets.com was one of a few dot-coms to shut down towards the end of last year. Each of them said they called it quits because they’d run out of money and couldn’t get any more.
We’ve been seeing that scenario play out for several months now. Start-up e-tailers lavished with venture capital and public attention in the dot-com heyday before spring’s market correction are finding themselves abandoned by investors and out of operating cash in autumn.
It almost seems as if there’s a rush on dot-com failures lately. Indeed, some financially-strapped companies may not have been able to make it through the recent busy holiday season when inventory demands were high. If that’s the case, we may be seeing a flurry of dot-com shutdowns in the next several weeks. Likely candidates are the e-tailers whose shares are trading for under a dollar.
Four recent dot-com dead don’t fall into the typical categories you think of when you think of holiday shopping: MotherNature.com, Furniture.com, Pets.com and Streamline.com. It’s hard to gift wrap a couch.
Still, retailers make most of their money during this time of year.
The categories certainly weren’t sure wins for e-commerce. Although selling a highly-specialized item on-line such as a heated cat bed makes a lot of sense, selling pet food on-line doesn’t. Why pay for shipping on a commodity item that is easier to pick up at the grocery store? While I’m at the grocery store I can pick up my vitamins, too, thereby eliminating the need to visit MotherNature.com.
And why would I want to pay for shipping on a big, heavy item such as a couch or a dining set?
These companies were hobbled by another handicap: They were all pure-play dot-coms. They had no brick-and-mortar operation to subsidize the costs of creating a Web site. They didn’t have an existing brand, either, so they were faced with building one from scratch. Those things cost lots of money. Extensive television campaigns for your sock-puppet mascot aren’t cheap.
Last year many brick-and-mortar companies took heat because of their conservative approach towards selling their wares on-line.
This year we’ll see the revenge of the brick-and-mortar. After fortifying their on-line operations these companies are ready to take advantage of the market created by the pure-play dot-coms. They’ve taken the lessons learned during last year’s holiday season and improved their fulfillment operations. They’ve spiffed up their Web sites. And they’ve promoted those sites in their brick-and-mortar stores.
Jupiter Research is predicting that e-tailers coming from the brick-and-mortar tradition will dominate this year in terms of number of visitors and number of transactions.
Meanwhile, I’m waiting to find out if Pets.com will still ship the heated cat bed. Perhaps I would have been smarter to go to a more specialized on-line store. An e-tailer that sells only pet beds probably has a much lower overhead than a company that tries to do it all. For example, www.contentedpets.com offers a heated bed for $11 less than Pets.com.
Davis is an editor at large in the InfoWorld (U.S.) news department. Contact her at jessica_davis@infoworld.com.