Virtual shopping mall saves time

Michael van Prehn (left) and Paul Cavanagh at the workstation in their garden shed in Hamilton where they began internet retailer JET20. Picture / Amos Chapple

The internet has become an important place for retailers to flog their wares, but much like trudging round town, it takes time to get from store to store and search the virtual shelves for the right product at the right price.

Virtual shoppers can now relax and sit back - more than they already do, that is - because the rise of the virtual shopping mall aims to eliminate all that keyboard-tapping drudgery.

Hamilton-based online superstore JET20 is the latest to target a consumer who doesn't want to spend all day hoofing it up and down the cyber High St.

The phenomenon, says JET20 co-founder Michael van Prehn, represents a big structural change in the retail sector.

"We're not advocating that it's going to replace [High St] retail shopping as you or I know it - that's very much a social thing for some people - but a lot of people simply like the convenience of doing it from home," he says.

JET20 launched two months ago and sells a variety of goods, from computers to cosmetics, from about 30 suppliers. Suppliers list their goods on the site for free, ship goods directly to customers, and pay a commission to the virtual store.

It sounds like a simple business plan - set up a virtual store with a vast number of suppliers and one point of contact for customers, and stay away from handling the goods. Then, sit back and collect the commission. It was an idea that was supposed to take two months to implement, but instead took 2 1/2 years.

Paul Cavanagh, JET20's other co-founder, describes multiple suppliers shipping to multiple customers as the "most dangerous model of all online". The biggest issue with this model, he says, is how to deal with dispatch problems, returns and customer complaints.

"When they do happen they need to be dealt with promptly, particularly with returns," Cavanagh says. "If issues aren't dealt with they can actually sink a business of this kind."

His solution was to build a complaints resolution process to standardise service from all suppliers.

Customers can thus track the delivery progress of their goods via the carrier's track-and-trace number, which is logged by the supplier.

If their goods are not delivered within seven days, a non-delivery link appears to warn the customer that he or she has an overdue delivery. An automated email is then sent to the supplier and JET20 management.

A similar selection and email process is used by customers returning wrongly shipped, damaged or misrepresented goods.

Having built the system for the company's own needs, Cavanagh now hopes to sell it into what he says is a fragmented sector where existing systems vary greatly in complexity.

"We wanted to be able to ensure that the industry started heading down a path where it played by the [same] rules," he says.

But online superstore sites are not the only format out there bringing multiple suppliers together under one virtual roof.

Yahoo Australia and New Zealand recently launched a product comparison retail service called Yahoo Shopping.

The site gives shoppers the ability to search for products by type, feature and price, comparing results from multiple suppliers side by side.

A fundamental difference between this and a superstore is that after selecting a product on the Yahoo site, shoppers are transferred to the supplier's website to make the purchase.

Rather than a sales commission, suppliers pay Yahoo Shopping a cost per click after customers transfer to their website, irrespective of whether they eventually buy something.

So far, all 75 suppliers are based in Australia, but Jeremy Crooks, head of e-commerce, is confident Yahoo's expertise and status will help it to gain a majority of the online retail market.

Shop till your connection drops

Hamilton-based JET20 is the latest virtual shopping mall, offerings goods from computers to cosmetics.

One of the site's co-founders says shipping goods from multiple suppliers to multiple customers is a "dangerous model".

Yahoo is getting in on the action with an Australian-based comparison shopping site.