There is no doubt that e-commerce is booming. But just who is making the money? That is a question of growing interest to US manufacturers and retailers of brand-name products.
For the first time, the Internet allows manufacturers with capital to circumvent retailers on a large scale, selling merchandise directly. And some manufacturers, such as jeans-maker Levi Strauss, are taking advantage of that opportunity - with significant consequences.
Levi Strauss has forbidden department stores and retailers to sell Levis products over the Internet. The reason: The company is retaining its prerogative to sell the jeans in its own cyberstore, Levi.com, free of competition. The move is causing alarm among retailers who fear losing customers to a cyberspace business in which they are not allowed to participate.
Also of concern to jeans retailers is that Levis' on-line store offers a larger selection of models and sizes than any department store can stock. Customers can choose from 16 types of jeans for men and 24 T-shirt and blouse models for women in all sizes.
An electronic 'style finder' helps visitors make choices - and allows Levis to gather valuable information about customer data regarding music, free-time, and fashion.
In addition, customers leave their e-mail address - making them targets of direct marketing. Levis is angering retailers further because every pair of jeans sold in stores carries a sticker with the Levis Web site address printed on it.
So far, no other large manufacturer has decided to follow the exclusive Internet path of Levis. The perfume manufacturer Estee Lauder, toy-maker Mattel, or watch-maker Timex offer merchandise on-line but allow retailers to do so as well.
These manufacturers assume that customers will go straight to the source and take advantage of the larger selection - instead of choosing the detour of using a retailer on-line.
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