I'm in the middle of writing up a Competitive Analysis for a small Pet Supply client that contracted with me recently and stumbled upon something (data) validating that ECommerce Engines work, in particular, MarketLive (but it's not only their platform).  I have a bunch of thoughts about what I found.  I'll give my conclusions at the end of this long post (I may brake it up to two or three posts if I need to).

Using Compete.com and Quantcast.com metrics on a field of 18 competitors (these competitors were harvested based on a comprehensive ranking report using my own methodology); I pulled the web stats of each and put them into a table which I then used to make a series of charts. 

I noticed that Petedge.com generated the longest visits of all the competitors and once I collected all my data - I started look at each site - in particular - petedge.com to see why (see orange bar above).

PetEdge.com also generated the most pageviews per visit (session - see orange bar above) and that really got me curious (yep, Avinash - that's why I'm a web analyst - we're all curious to the bone - have to be or you can't succeed in this field).  I also pulled something out of Quantcast that was different for PetEdge than any of the other competitors (including my client who I won't identify) - see the chart below.

Petedge.com was the only competitor that had an audience of "addicts" - people who keep on coming back, over and over again - because they're loyal to the site.

I defined loyalty differently than Google Analytics - looked at visitors who come once (Visitor Passers-by), those who come regularly (Visitor-Regular) and those who are Visitor-Addicts (green bar, see above).   Somehow, PetEdge had managed to collect a regular audience of passionate users (I estimated between 4000-6000 visitors are "addicts" here - but it may be more as Quantcast and Compete's Unique Visitors are not that accurate yet and usually under count, sometimes by quite a bit).

So I went to PetEdge.com and noticed they had a "recommendation" system similar to Amazon (but not as powerful); the site also asked for my zipcode and gave me the option seeing the catalog pages with or without graphics.   But somehow, I did not feel that was really the main reason.   So I did a search on "Petedge.com Press Releases" in Google and found an old press release from 2002 from Internet Retailer.

 "…Petaluma, CA — November 13, 2002 — Multimedia Live (MML) (http://www.mmlive.com), the leading developer of e-commerce technology and services for Intelligent Selling(tm) on the Web, announced today that it has created a new e-commerce website for pet supply cataloger and distributor PetEdge, formerly the New England Serum Company (www.petedge.com). This business-to-business and business-to-consumer website uses the MarketLive(tm) Intelligent Selling System(tm) as its technological core. Pet edge selected Multimedia Live and its MarketLive product because of its advanced features and functionality that make shopping online easy, integration services that seamlessly tie the new website front-end to existing back-end systems, and its overall approach that creates an effective online brand presence and leads to increased sales and customer loyalty."

There's more - (that's what I'm getting paid for - so I won't share it all here).  Suddenly the light went on.  I had just stumbled on a truth - something that no one could see until a couple of months ago, without Compete.com and Quantcast.com entering into the free web analytics market.  It's an hard truth for some.

The obvious part - PetEdge made a insightful decision over 4 years ago in using MarketEdge Technology - at that time not everyone believed Ecommerce technology would make all that much difference - and it was expensive.  Clearly, the Engine worked - it provided customer satisfaction and results enough to get people who wanted to order pet supplies to come back, over and over again.

But the harder part, for me to swallow - most companies can't afford to the kind of investment in technology the leaders in Pet Supplies have invested.  Not only that, but the leaders in web stats were also the leaders in catalog supplies before they went onto the web.  That means, the Web might not really be the Great Equalizer that people have often thought.

Clearly, success depends on several things, not just one thing.  SEO work I did with architects (I still have one client, Alan Mascord, but have dropped the rest) revealed leaders in online house plan sales were also the leaders in magazine and book fulfillment - most of the leaders for stock house plans were heavily invested in (both though highly networked groups of sites, rich PPC programs, Affiliate Programs and many print publications).  Even when a startup like houseplanguys.com became successful, it got bought out by larger firms.  Incentives like buying directly from the architects, in THD's case, are simply not enough now.

Getting back to the Pet Supply field, another article on Drsforstersmith.com, another competitor who also invests quite heavily in Internet technology and the Ecommerce back end says:

"….Drsforstersmith.com - Foster characterizes pets supply retailing as “a razor-thin-margin business where the average ticket is very low.” The company’s biggest concern, he says, is the competition from newcomers such as Drugstore.com and niche players who may concentrate on a single, or just a few, market segments such as pet groo
ming products or tropical fish, not from the big chain retailers such as Petco and PetSmart. “We are always concerned about the ones that can pick away at you,” he says. “They’re the ones we need to be the most aware of.”

The Internet has not really been the great equalizer - not for the long term players.  Sure, you can get traffic from an article from boingboing.net - or something that goes on for your 15 GB of fame - BUT.. to be successful in a big way requires a bit more.

Experience has now shown me most of the leaders in the Internet Marketing, Internet Commerce, also started as leaders in offline media and, having leverage, made smart choices in technology and marketing - these choices augmented the difference between them and the smaller guys - who can't possible compete, except in the niches.

But, as the Eisenbergs have noted - the bar keeps lifting - what worked a couple of years ago is not going to work the same way now - that's why some former clients like THD can hardly even brake even. 

The Companies leading on the web are jumping further and further ahead - making smart choices in product inventory AND Ecommerce back ends.   It's not any one thing - there's no single thing that anyone can do that's going to suddenly make your business successful on the web - it's an entire process chain. 

That's why the gap between those who succeed and those who fail are getting wider.

What will I tell my client?  I'll  lay out the truth, as I see it.  I want to give people hope - but -  fundamentally - I don't think businesses can succeed, long run, on the web, without the entire process - the methodology, as Eric Peterson mentioned in his predictions for 2007 (see below).

"…The many smart companies that have invested already in technology and people will increasingly realize that without addressing their Web Analytics Business Process they will still under-appreciate the full value of their investment in web analytics."

No, the Web is not the Great Equalizer, not any longer.  Of course, I want to work with clients that can succeed, that are willing to invest (and also put in action what I come up with - when it makes sense). 

Sure, clients  succeed in smaller ways, probably that will fulfill most of their expectations - yet real success, build-able, sustainable success (they type they all dream about), online, takes more than what most people are going to invest, and that's the truth.  It's not only investment, it's the methodology that goes with it and people, like me, that understand it.

That's what I want for 2007, for me.