October 30, 2003, 12:00 AM

Manufacturers solve their online dilemma

(Page 4 of 4)

A direct benefit for SanDisk is its ability to refer customers to its chosen group of top retailers that SanDisk can rely on to provide quality service and consistency in product presentation. “We choose retailers based on their reputation with us, the ones with the best customer service and best sales records,” Chan says.

She adds that SanDisk has been pleased with the rate of sales conversions realized by its retail partners. “When they click from our site to a retailer, they often end up buying,” she says.

Channel Intelligence provides a service to 70 manufacturers that links their web sites directly to the e-commerce sites of retailers. About 180 retailers participate.

While the typical sales conversion rate for retail web sites is about 2%, Challenge Intelligence reports that shoppers who link to retailers from manufacturers’ web sites via the Channel Intelligence system convert at rates of 8% to 20%. Within a week, 34% of visitors to Channel Intelligence client sites make a purchase, either online or offline, the company says.

Channel Intelligence charges between $1,000 and $25,000 a month for its service, depending on a manufacturer’s number of SKUs and the average purchase price of each SKU. For that it provides network connections between a manufacturer’s site and the sites of up to 15 preferred retail partners. Using web services technology designed to easily integrate different computer systems, the network connections can be completed in a day, says president Alan Fulmer. Other than a JavaScript connection it builds into the manufacturers’ web sites, Channel Intelligence clients are not required to build anything onto their own infrastructure, Fulmer says.

Channel Intelligence, which introduced its service a year ago, says most of its client manufacturers had previously forwarded online consumers to the web sites of large retailers known to carry their products. “But shoppers then had to find the product they wanted, then see if it was in stock,” Fulmer says.

Under the Channel Intelligence system, shoppers click on a manufacturer’s product link to call up a list of retailers showing each merchant’s retail price and inventory status. They then can click on one of these retailers to go right to the buy page for the product.

Chan notes that one of the main advantages of the Channel Intelligence system is that it can save shoppers time in making decisions, which can make them more likely to buy before leaving for another source. “We realize they can always go somewhere else,” she says.

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