ibizMagazine.com's trade show reporter Wayne Messick took copious notes on Cassar's comments. The following is an exclusive iBizMagazine.com alert for the benefit of our mainstream business readers.

The main theme of Cassar's remarks was that the big challenge over the next several years would be customer retention more than customer acquisition.

More than 40 percent of American households are now connected to the Internet, according to Cassar, and that number is expected to reach 63 percent of all households by the year 2003. Cassar predicted that 100 millionAmericans will be online by the end of 1999.

Jupiter breaks the online population into five distinct categories, which are, in order of decreasing size: adults 19-50, older adults, university students, teenagers 13-18 and children 2-12. "We are going to see the emergence of affinity portals, demographically and geographically based," explained Cassar, who predicted that today's top 10 portals would drive smaller proportions of Web traffic than they have done so far.

Rather than yahoo.com/sports, people are going to find it more natural to go to sportsline.com, suggested Cassar, as one example of the move to niche-portals and away from today's super-portals that have been commanding billions of page views and advertising dollars.

The annual growth of the online shopping population is already slowing, according to Jupiter, even as online sales continue their steep rise.

From 1998 to 1999, total sales increased from $7 billion to $12 billion, while the number of shoppers increased by 55 percent. By 2002, according to Cassar and Jupiter, sales will reach $41 billion while growth in the online shopping population will have slowed to 26 percent.

The message is, said Cassar, "Companies must focus on getting more value out of each customer ... keep them coming and buying."

Of those intended purchases, Cassar went on to explain, 19 percent occurred after just visiting one site; 29 percent, two sites; 46 percent, 3-5 sites; and 6 percent, 6+ sites.

"Price is the prime motivator," said Cassar at his Andromedia presentation. Other key considerations in the purchasing decision are, in descending order of importance, searchability, credit-card security, comparative information, delivery time, ease of ordering and product presentation.

"Customer acquisition and retention hinge on unsurpassed service," said Cassar, "which spans the whole experience." He explained that customer service is "not just about CSRs and call centers."

It starts at the home page and requires a shift from "reactive customer support" to "proactive customer support." And, of course it depends on "great response to customer inquiries," Cassar said, reminding merchants to make their interactive tools work for customers as decision-making tools.

Personalization, says Cassar, should be seen not as a customer acquisition tool as much as a customer retention tool.

Lots of room for improvement in customer service
Though customer service and fulfillment are still "the Achilles' Heel" of the online retailing industry, according to Cassar, there are some encouraging signs of improvement.

66 percent of the leading ecommerce players replied in one-two days to email inquiries in the second quarter of 1999, compared to 43 percent in the first quarter.

To retain customers and sales, your company must be "channel-agnostic," according to Cassar. The main reason for a traditional merchant to add an online presence is "to defend market share," he explained.

The winning strategy is to leverage the synergy between brick and mortar stores and a Web site, said Cassar. Brick and mortar strengths are, according to Jupiter, environmental immersion, immediacy and familiarity; Web strengths are convenience and personalization.

The combination of the two results in growth opportunities and cost savings. Cassar had one warning, though: "Don't try to recreate a store environment, walk-down-the-aisle experience online."

The key to success is to let your Web site do what it does best--facilitate the ongoing relationship with your customer and make it easy to find out about new products and services.

Direct-marketing and catalog businesses can leverage the synergy between the catalog and a Web site, too, said Cassar. Catalog strengths are the ability to push differentiation, familiarity and customer history.

Cassar concluded his Andromedia presentation by emphasizing the strong online commerce outlook and reiterating that "personalization, in a proactive manner, will be a winner."

He encouraged traditional merchants to take advantage of channel-shifting to service their customers even better by leveraging a brick and mortar store with a Web presence.