Recently, e-commerce
has been associated with some fairly humiliating
phrases..."dot gone" and "dot bomb" being just two of
them. At times, e-commerce has become almost worthy of
a snicker when the term comes up in conversation, and
lately it's hard to open a newspaper without reading
about "pink slip parties," which former dot com
employees attend to network, write resumes (which they
didn't need during the venture capital boom), learn
that flip-flops and cut-off jeans are not appropriate
work attire in the real world and finally, come to
accept that the fairy-tale employment they have
experienced in recent years has disappeared as
spectacularly as Cinderella's royal ball accessories
at midnight.
From the sounds of the media, you would think that
e-commerce was a landscape of post-Armageddon. That
must be why e-Bay is experiencing 150 percent growth
this year.
Want to know a secret? Total e-commerce sales have
been predicted to grow somewhere in the area of 40
percent this year. Jupiter Research discovered that,
from April 2000 to April 2001, the growth of the adult
online population increased 18 percent. A study by the
National Association of Purchasing Management and
Forrester Research indicates that business-to-business
e-commerce is still in its infancy, with nearly
unlimited potential to grow. A survey conducted by
both organizations revealed that 84 percent of
companies polled indicated they would be moving
forward to implement e-procurement sometime in the
next 12 months. This growth is modest compared to what's
happening off-shore. Boston Consulting Group has
reported that Asian e-commerce continues to double
annually.
Don't get me wrong...I understand that this
industry has taken a major hit to the collective solar
plexus. Amazon seems to be hanging on moderately well,
though probably not flourishing, despite a company
spokesperson's recent affirmation that, "We've got
piles of moolah." It is generally acknowledged that
the implosion of many players on the e-commerce stage,
most notably the ones headed by 23-year-old CEOs, has
enabled the companies left standing to reap more
profits due to Web-enabled natural selection.
Travelocity is doing fairly well, though rumor has it
that Expedia is in trouble. This is a no-brainer to me...in
my view, Travelocity is the better company.
Old Dogs Have Learned New Tricks
Research firm McKinsey & Company recently
unearthed a fascinating statistic: three-fourths of
the most successful e-tailers are online channels
of existing, established brick-and-mortar companies.
Someone a long time ago put forth the radical theory
that a company needs a business plan to survive in the
long-term. Web-based companies slapped together on a
Saturday afternoon in someone's home office are not
likely to have as sound business plans as a company
like Eddie Bauer that has been around for generations.
Three years ago, the retail giants were laughed at for
their hesitant and puny efforts to join the e-commerce
party. Today, they are the ones left standing.
Methinks there's a lesson to be learned in that.
Here's another interesting trend. In the days of
yore (one or two years ago), many Internet-savvy
consumers indicated that when it came to shopping for
larger ticket items such as audio, video and
computers, they would do their research online before
heading down to a large electronics superstore such as
Circuit City to make a purchase. Today, many people
have taken to wandering the aisles of the large
electronics stores to see and touch items, and then
return home to make their purchases from online
electronics e-tailers. Why not? Online returns
policies have improved about a thousand percent since
the early days of e-commerce and in many instances,
there is no sales tax on items purchased from e-tailers.
Not to mention the fact that buying online enables you
to spend the time you would have dedicated to getting
to the mall on some vital task such as sleeping late
or reminding yourself what your family looks like.
Trying Not To Antagonize Your Customers Helps
Immensely
E-commerce companies that continue to grow seem to
be the ones that better understand CRM and what it
means to their firms. There's no question...purchasing
over the Internet is as popular as ever and will
continue to grow. What many e-tailers didn't foresee
is that the Internet business model enables customers
to be fantastically fickle, and all it takes is one
misstep to lose a customer forever. Good self-service
is worth its weight in rubies, but it should never
entirely replace human interaction. As a result, it
becomes fairly safe to conclude that the e-businesses
still standing today are the ones that screwed up CRM
the least.
The survivors have another thing in common: easily
navigable Web sites. Remember some of the disastrous
Web sites that first appeared three or four years ago?
The designers sacrificed ease-of-use for art and
profundity, with the result that many potential buyers
arrived on the site, admiringly commented, "Ooooh,
pretty" and logged off to find a site that was easier
to use. Part and parcel of ease of use is a friendly
and comprehensive search engine, and this is another
element you will find on the sites of the little e-tailers
who could. Search engines driven by natural language
processing are rapidly gaining in popularity as they
allow shoppers to pose questions in much the same
manner they would to a live store representative. For
instance, "I would like to compare brands of digital
cameras in the mid-price range." Not only do searches
conducted with natural language processing help the
customer, the technology can also help the e-tailer
understand what its customers want and how they want
it.
Privacy, Please
Yet another element that has helped some e-tailers
remain strong is the issue of privacy. Many companies
with Web channels have had some decisions to make in
the last year: collect customer data and e-mail
addresses and sell the information for a price to
boost sagging profits, or prominently reassure
customers that their information is private and will
remain so in the future? The former choice represents
a short-term fix and the latter choice is the ticket
to the long-term payoff. Many companies that sold
customer data from the get-go or made a decision later
to sell information seemed to think that their
activities would not be noticed, or that the average
consumer wouldn't care if they received a few extra
spams brought on by the sale of their personal
information. This was a serious miscalculation...in a
crowded information age of little free time and space
to breathe, most consumers are becoming rabidly
protective of the little privacy they have. More
importantly, e-tailers and Web marketers that chose to
collect information from children not only earned the
ire of parents, they began to draw fire from federal
and state regulators.
The way I see it, the vast majority of companies
that made a go at succeeding in e-commerce only to
fail a year or two later are like kids who begin
playing with a complex toy and give up in a huff when
they can't operate the toy based on the fact that they
didn't read the instructions. All's well and it ends
well...the toy becomes available to the kid who values
it and knows how to use it.
The author may be contacted at tschelmetic@tmcnet.com.
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