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ECMgt.com brought to you by ECnow.com ECnow.com 2000 trends: Expanded E-Commerce Management (ECM) Deployment READER COMMENTS Our bulletin board allows readers to comment on trends and issues throughout the month. Please stop by to add your comments and see all the responses at http://ecmgt.com/bulletinboard.htm Question of the Month The topic for February focuses on expanded ECM deployment for 2000. Selected Answers of the Month *** Brick-and-mortar companies will deploy integrated customer
interaction solutions, beyond just phone and email. Companies will expand the
interaction choice to include live text chat, web collaboration, and voice over
Internet in 2000. They'll also deploy self-help and digital marketing solutions. Expect traditional companies branding to the Web to double in 2000. The advantage the traditional companies have at this point is learning the lessons from early e-commerce adopters, and will thus have a good chance at doing it right when they launch in 2000. Also, modern technology applications have been proven by this time for traditional companies to embrace with confidence. (Ashutosh
Roy, CEO of eGain, Sunnyvale, California USA *** (M.S.,
Minneapolis, Minnesota, USA) *** All companies of any size are
currently expanding their brands to the Web. Most will have difficulty integrating
on-line marketing with historical marketing techniques and processes. On-line
marketing receives instant response and calculates instant marketing data, statistics
and the buying ratios of people who visit the site. This will be different
in direct consumer sales on the Web as opposed to B2B. However, the instant
capabilities of Web marketing allow marketers to make decisions in real time,
not based on statistics accumulated from sales people, who may or may not take
the time to provide the input needed for customer feedback. Major
companies utilizing the Web will be those that have the vision to modify processes
and cultures to accommodate a new way of doing business, e.g. Cisco Systems which
now transacts about 65% of their business over the Web, even including sophisticated
configuration schematics which the customer provides. The supplier has effectively
offloaded a great deal of the process side of selling to the customer. Commodity
products obviously lend themselves to Web marketing, but any business which requires
customer to supplier and supplier to customer interface, can now be done in real
time. E-Commerce will change drastically the way we do business, think of customers, and accumulate marketing trends and statistics. (Len Duncan., President, The Duncan Group,
San Jose, California, USA) *** Brick-and-mortar companies will have to be willing to cannibalize their own current business in order to grow their Web business. Many large companies will spin off their Internet business so they are operating as separate entities which may compete with each other. All
lasting brands will realize that the web is not optional and must instead be an
essential part of their marketing and business plans. During the year 2000, brick-and-mortar
companies will struggle to figure out the best mix. I think it will take longer
than a year to understand this medium and make the most of its potential. Major companies will have to rethink their strategy of mass manufacturing and change to a more personalized one to one marketing strategy spoken of by Martha Rogers of Peppers and Rogers. Those that design products will have to change what they make and how they make it to reflect the personalization and customization the Web makes possible. (Karen Lake, CEO/Founder of http://www.StrategyWeek.com, Portola Hills, CA, USA) *** Now that companies are done tying up their IT
Departments with Y2K issues, a huge swell of momentum will hit the e-commerce
world in force. Unfortunately, I don't think there will be enough developers with
experience to meet this huge demand so you will see more products to make the
development process faster and easier. The most successful companies will be those that think out of the box and advertise not only in the traditional markets of TV, radio, and magazines, but also on taxi cabs or buses, or even banners pulled behind small planes. Sponsorships of events will also be popular. Basically, anyway that a company can get eyeballs and distinguish itself from its competitors. Branding is going to become even more important and those web development companies that can handle the entire project from beginning to end are going to come out ahead over those who just specialize in a given area. (S.R., Seattle, Washington, USA) *** Brick-and-mortar companies will reorganize their internal structure and many will have new e-business departments. The traditional companies are mostly on the web in one form or another. But many of them do not actively push their old brand. Some will just push their old brand in an old fashion way on the Internet with an old marketing approach (not very targeted but a lot of money spend for attraction). Others will start with a new on-line brand, which is still loosely coupled to the old brand to maintain the trust, but gives freedom to expand into new business fields on the Internet channel. The meld of on- and off-line marketing game is still not really played yet. There is a huge potential for most of the companies! The successful companies will continue to dominate the web (Yahoo, Amazon, AOL-Warner etc.). New players will be companies which understand to serve the third wave Internet users, who are now entering the medium. This people are far less skilled to surf around and need very convenient and smoothly operating websites. They are still rare in the technology driven Internet world, where the customer is often still a disturbing factor and not really asked how he would like to be served. Companies who are the kings in the old world (Sony, Panasonic, P&G, Henkel, Nestlé...) will be the kings in the new world, if they discover this opportunity and really go for it. (R.B.,
Zuerich, SWITZERLAND) *** Right now, a virtual visit to any number of technology solutions or service providers in the B2B e-commerce space reveal a wall of fluff: boosterism, buzzworditis, and blurred distinctions clogging what could be a clear, direct communications channel to customers. I spent yesterday trying to determine how much hosting Sapient, IXL, and Kinzan do, and differentiating their services was well-nigh impossible from the content on their Web sites. I'm talking about basic information, like what does the company do, what market does it serve, how will its technology/services help solve business problems. Seems like everyone's so in a rush to ride the e-commerce wave to prosperity that they forgot to explain what it is they actually do, leaving the uninitiated perennially confused. I can't help but think this confusion about Internet commerce is extending to potential customers as well. (J.D.,
San Francisco, California, USA) *** I expect there to be even more advertising, more focus
on creating brand-recognition, more focus on translating individual attention
into valued repeat customers. But 'tidal wave'? All growth is paced along the
ability to obtain talent and we are still lacking an experienced talent pool that
can support a 'tidal wave' <grin> Most
companies have a focus of giving their consumers information about the products/services
that they provide. Off-line marketing is including a web address as a matter of
fact, it no longer seems odd, it is expected. A recognized brand-name without
an on-line presence will be considered archaic and (I believe) detrimental to
their brand. Utilizing on-line marketing for off-line purchases I have yet to
see but I expect it to be included eventually. I think that the major instance for this on-line marketing will be at the portals, where your profile is already known and can be utilized. It is a waste of time & money to develop marketing plans that don't work, I think that more development will be made into 'smart ads'. Whether it is on a personalized homepage from a major site, banners on a search engine or web-site page, or (I dread the day) permanent browser pop-up advertising windows that is linked to your profile, marketing on-line will be just as routine as 'traditional' marketing means and just as targeted. (M.R.,
Cupertino, California, USA) *** Brick-and-mortar's have to collaborate, Example: I can buy a Text book in Sydney at a local bookstore (+delivery) for $Aus160, but I can buy the same book from Amazon for $Aus125 (includes international courier charges and exchange rate conversions) Centralise billing, negotiate middle market players for stock they can't find, negotiate costs, expand offices, centralise management, call centers, share premesis, less stock "on the floor" (R.M., AUSTRALIA) *** Any traditional merchandisers that don't open a dot-com group in 2000 are going to be in trouble if their competitors go on-line. So I'd expect to see over half the major brands having a site, and probably 5-10% having an e-commerce sales channel. One of the things that has held companies back from making the e-commerce investment is concern that it might compete with the traditional channels rather than adding incremental sales. Now that some case studies are available, this concern will probably diminish, and more companies will jump in with both feet. Which companies? The companies with reasonably progressive top management. (J.S.,
Silicon Valley, California, USA) *** (J.O., Silicon
Valley, California, USA) *** (A.S., Paris, FRANCE) *** (S.S., Spring Grove, Illinois, USA *** Brick-and-mortar companies have to improve their services. Specific focus on timely delivery schedules, quality and pricing need to be logically and logistically planed as part of their goals and actions. I expect all service oriented companies from groceries to Oil terminals embracing e-commerce. They must either embrace the technology and ensure good backend support resulting in higher quality and timely services. (P.M.K., Mumbai, Maharastra, INDIA) *** Basic product information and product usage with a definition of the industry or market segment is already provided by many companies. Once the prospect provides requested personal data, the system will issue a user name and password and allow the client or prospect entry into more sensitive date and pricing. The real issue is to what extent can they eliminate the middleman and regain control of promoting their own products within their guidelines. We are already seeing tremendous growth
of e-commerce. Anyone that has any service or product to offer will be on the
web. Access to major sites is already becoming painfully slow as the numbers increase
at an exponential level. Finding what you want is also painful as more and more
popup windows automatically appear creating distraction and interfere with the
original search. We believe that marketing is about to be redefined. As consumers,
large and small appear on the web, the business transacted both ways will increase
at an astounding rate. More and more companies are contemplating other, secure
and less loaded networks to communicate and do business. We believe a new compression,
transmission technology will be introduced to facilitate this process. Without
exception, all major companies will embrace the Web or be out of business very
quickly. *** (S.B., San Jose, California, USA) *** Brick-and-mortar companies will copy what they consider to be state of art or what their competitors are doing. I see lots of me too from the masses. I really like what I read about what Wal-Mart is doing. And I think they have a good approach to develop a great model of a brick-and-mortar company. The rate of investment will expand at an increasing rate. I don't see a reduction in off-line marketing to offset the increase in on-line marketing. Again, I see Wal-Mart becoming a leader during 2000. I think the relationship they developed with AOL will serve them very well. Now the only problem is keeping AOL's attention. But the fact that they set up a separate company in Silicon Valley should reduce this attention span problem. (S.T.,
Granite Bay California, USA) *** Brick-and-mortar firms will focus on two basic items. The newcomers will focus their energies on establishing on-line catalogs and order processes. Those firms that already have a face to the consumer market via the Internet will begin to focus more on personalized marketing to target audiences and individuals. New comers with capital and vision will look to establish the personalized marketing aspect as they build their Internet infrastructures. The Web will become an integral part of all traditional companies business strategy. You will see significant growth and commitment to resources across the board. You will also see supply chain initiatives which take advantage of the power of the Internet to reduce costs, and increase collaboration while reducing time to market. You will also have the initiatives to create on-line catalogs, on-line purchasing and personalized marketing. Forward thinking companies will embrace the Internet to create true virtual enterprises. The Internet provides some of the essential tools to create the virtual enterprise that to date have been lacking to enable real time collaboration. It is no longer a matter of which firms will embrace the Internet, the question will become how does a firm utilize the Internet to enhance their market strategy and position. (R.Z., Lombard, Illinois, USA) *** (P.S., San Jose, California, USA) *** (S.V.,
Santa Clara, California, USA) *** There will be an effort to go-direct with traditional brands but the resistance will continue due to channel conflict. Off line and on-line marketing are the same. Just different means of delivery. The media companies will embrace it first. (J.F., Vancouver, British Columbia, CANADA) *** Brick and Mortar companies have an important asset most cyber companies don't have: Brand and Image. I believe (and recommend!) they will use that as a primary competitive tool in developing their e-commerce capabilities. If it isn't an extension of their current business, most traditional companies faced trouble launching an e-commerce capability within their companies. I believe that's due to important factors such as resistance to change, miscommunication (or worst : NO communication) or low skills/knowledge. As the Internet, and especially the World Wide Web, became more common, E-Commerce got more acceptable and several projects regarding to e-commerce got started in many companies around the world. (S.V., The Hague, The NETHERLANDS) *** (M.S., ARGENTINA) *** acceptance?
If economies stay healthy, e-commerce will also stay healthy. If economies suffer,
e-commerce will suffer. Remember that the e-commerce phenomenon isn't affecting
everyone. The only way to sell gasoline is to first sell people an internal combustion
engine. It's in the oil companies best interest to promote gasoline consuming
equipment. Likewise, if e-commerce is going to stay healthy and be more widely
accepted, the companies entering the e-commerce market are going to have a vested
interest in making sure a greater part of the population has computer access ("drives
a car") and has Internet access ("has roads and highways on which to
drive that car"). This directly affects the answer to the growth part of
your question and I will briefly switch metaphors to answer. Goldfish will grow
only as large as the environment holding them. You want big goldfish, get rid
of the fish bowl and get a 20g aquarium. E-Commerce will grow only as large as
the current Internet infrastructure can support it, at which point it will either
collapse under its own success or reach a stability point.
Currently there are no taxes on e-commerce, just as originally there were
no taxes on roads. Much of e-commerce at present is still based on an exchange of electronic currency for hard material. You can order books with a credit card but those books are delivered the next day. Same for cars, clothes, food, gifts, ... The next step will be in the exchange of electronic currency for information. That currently exists in the form of purchasing software on-line and downloading it, or perhaps purchasing a picture which you can print out or even some streaming video. Unfortunately, all of these require the information source to reside on the computer, ie, the information isn't mobile. The real e-commerce will be when you can order music on-line, download it to your CD writer and burn your own CD while you sit there, then take that CD with you to the gym and listen to it while you're doing your workout. When you can download a movie to your DVD burner then take that DVD out of the computer and play it on your home entertainment system, then the next wave of e-commerce will have arrived. I expect brick-and-mortar companies to either succeed or fail. Success will come from the companies which extend their business to the new media rather than recreate themselves for the new media. Barnes and Noble is an example. They were losing when they went head to head with Amazon, then they realized that they had brick-and-mortar storefronts everywhere. Now if you order a book and it's in stock at the local store, you get it the same or next day, not in a few weeks. That's an example of taking stock of what you already have in place and leveraging (god, I hate that word) your existing assets to create value in the new arena. Failure will come from companies who think they need to reinvent themselves for the new market because there isn't a new market, only a new channel to existing markets. A recent study of brick-and-mortar companies which started eTailing and had existing mail-order catalog businesses (think "L.L. Bean", "Land's End", "Harry and David", etc.) showed that the business coming in through the front door grew as expected. Obviously e-commerce was totally unprecedented but only because it's such a new beast. The surprises came from the people crossing over from e-commerce to traditional catalogs and vice versa. The market hasn't changed, the way to reach the market has. Companies which aren't aware of this will have a hard time making it in e-commerce, unless they can define a totally new market for their product or service. There's much demographic study being done to determine if the on-line and off-line markets will be traditionally or non-traditionally based. Do we follow the traditional views of retail anthropology? How does the consumer's experience vary from on- to off-line and vice versa? There will be some crossover, I'm sure, just as some advertising which is shown on Arts-and-Entertainment's "Biography" also shows up on NBC's "Friends". But how do you simulate a driving experience on the web? How do you smell garlic cooking or taste chocolate or feel fine silk? There seems to be an oxymoron in that question; "major company" "embrace the web". One won't be without the other, either via e-commerce or e-business. Any company which starts with e-commerce is going to require e-business sooner than later. Any company doing e-business will probably find an e-commerce venue they can address. What will they be doing? Hopefully business with us, but in lieu of that they'll be utilizing new and existing web strategies to get their message and value proposition across. 'Nuff said? (J.C., Nashua, New Hampshire, USA) *** a) The Brick and Mortar businesses (GE, HP GM etc.) will try to "get on the Band wagon "their way" (and will fail). They will re-try, until they get it right - or will find themselves being "absorbed"; i.e. recent AOL example b) The less stable new-comers (resource poor) will follow "Beyond" into the neverland very quickly. (U.H.B., Silicon Valley, California, USA) *** I foresee a move towards "total virtuality" in 2000. You will most likely see this trend first in the workplace. Companies are trying to find unique ways to attract and retain workers. With technology, including the Internet, you can perform practically most job functions without face to face interaction. This virtuality concept will be extended to the consumer market where all purchases and business transactions will be performed on-line. The B2C market is rapidly expanding. Companies are sponsoring computers and Internet access to school systems across the country. Recently, AOL, announced a plan to equip all schools in Mississippi with computers and access to the Internet. Although the intent is to ensure these children have the necessary tools to compete in today's society, consumer purchases will increase as school agers become familiar with this technology. AOL scores big points for this win-win situation. E-Commerce and brick-and-mortar companies will have to co-exist to survive in 2000. Depending on the nature of the business, the ratio mix of where companies invest marketing and development dollars will swing more towards e-commerce. Some companies' brand identify will automatically draw Internet traffic to their sites; thus, this becomes a factor in determining the appropriate ratio mix. Companies that are not embracing the Web will lose in the end. However, those that are, will have to constantly monitor Internet activity as part of their market research function to steer long and short term strategy. Companies that will have an easier time embracing the web are those that offer consumer products i.e. Kmart, Target, etc. and those that make consumer products i.e. Maybeline, pharmaceuticals, etc. However, those that offer services i.e. hair salon, could take advantage of the web marketing opportunities. (KB, Memphis, Tennessee, USA) ***
I expect brick-and-mortar companies to enjoy a shorter development cycle to prime time status due to outsourced solutions such as Doubleclick, BeFree, Kana. I expect brick-and-mortar business such as auto repair and child care to make slow expansions to on-line marketing that drives prosects to their existing flesh and blood relationships. (D.F., Palo Alto, California, USA)
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