This is an abridged chapter from E-Volve-or-Die.com which contains Mitchell
Levy's E-Commerce (Business) trends for 2001. The book is available at all
major stores on and off line. You can pick it up at http://www.amazon.com/exec/obidos/ASIN/0735710287/ecnowcom/002-1231670-9810413
E-Volve-or-Die.com - Chapter 13 - A View from
the Real World
by Mitchell Levy
Any new business philosophy or set of principles
should be tested in the real world in order to validate what is real, what
is feasible, what works and what doesn't work. I surveyed people online
and talked to several executives who are deeply involved in e-commerce implementation
about what they have learned so far, and more importantly, what changes
we can expect in the next few years. This chapter focuses on what they said.
The online survey was sent to the readership of ECMgt.com, my online e-zine
that explores the trends in e-commerce management on a monthly basis. The
executives quoted here were also interviewed for other chapters in this book.
In the process of evaluating the responses, there
were ten general topic areas and trends that emerged. All quotes and predictions
are grouped by these ten categories, beginning with a look at the new economic
environment, and ending with ideas about evolving the company for growth.
NOTE: For brevity of this article, only the
first three quotes in each section are used. Look to E-Volve-or-Die.com to see
all the quotes in this chapter.
Trends from the Real World:
More Things Change, the More they Stay the Same
New Economic Environment
New Internet-enabled World
- Better, Faster
and Maybe Cheaper
Models and Value Webs
Standards and Rules Create Opportunity
Infrastructure and Tools
New Face of Marketing
Dimensions for Growth and Evolution
The More Things Change, the More They Stay the Same
The tried and true
basics of business will be back - to remind us of the old-fashioned principles
that still seem to work, even in this new Internet-enabled world. Profitability,
revenues and proven processes will be key.
Sisson, Chief Strategy Officer, wine.com
"The new e-commerce brands will
grow more slowly because the investment community has no patience for losses.
The emphasis will be on profitability, which means we will see fewer expensive
Sean Kaldor, Vice-President of
E-Commerce, NetRatings Inc.
"E-commerce business operations will mature,
and overall methods will solidify around a few key processes."
Hanna, Vice-President of People, Homebid.com
" New e-business companies
are becoming more humble as they begin to realize that some of the basic
rules and principles of business (such as profitability) applies to them,
just as it does to the "brick and mortar" companies. Based on these trends,
what I humbly predict in the future is a mutual admiration between the "click
and close" companies and the "brick and mortar" companies, where each will
learn to respect and leverage their approaches to business."
The New Economic Environment
Although we are already mired in the New
E-Conomy, we are just at the beginning of the changes, as brick and mortar
companies race to be successful on-line, and dot.coms try to dethrone established
companies' brands. There will be more consolidation, hybrids, partnering,
and new business models that will shift the mix and balance of power.
Clyde Foster, CEO, eConvergent
will be a more seamless merger of online and offline worlds. Brick and mortar
companies will get better at online business, and dot coms will get better
at traditional business and profitability. Economies of scale will result
for both worlds."
Lisa Sharples, Chief
Marketing Officer, Garden.com
"A multichannel approach will be used for
all e-commerce companies, including retail. The line will blur between who's
an e-commerce company and who isn't."
Gerber, Chief Strategy Officer and Vice-President of Marketing,
"The age of the large conglomerates is over. Ten years from now, the Fortune
500 will be irrelevant. Those that survive will either be invisible giants
running the infrastructure for everyone else or those that will unquestionably
own their customers through passion-invoking brands and impenetrable customer
3. A New Internet-enabled
In the not too distant future, the use of the Internet will be routine,
rather like electricity, as the comfort level with the technology and this
method of doing business evolves. Not only will more of our work and personal
lives be connected because of the evolving technology infrastructure, but more
integrated as well. Processes and functions that we use in the workplace will
make their way into our homes. A total Internet-enabled world where every
IP appliance can coordinate an exchange transaction with or without a human
guide, is right around the corner.
Mehrotra, Vice-President and General Manager, American Express Corporate Services
"In the near future, conducting business online will become
the norm. There will be a much higher level of comfort in conducting business
online, from both the company's and the customer's point of view."
Barbara Jones, Director of Customer Service,
"The customer of the future will live in an Internet-integrated
environment - extending to the home. Ideas such as smart home appliances
like smart refrigerators, or cars that alert you to the maintenance schedule
- all controllable via the Internet - are just around the corner."
Dylan Tweney, Writer
and Consultant, Tweney Media
"There will be more e-commerce in general
and people will be more comfortable with it. We will also see e-commerce
in more contexts - embedded in web applications and in Internet devices."
4. Customers Rule
With the Internet,
customers have gained considerable power to choose with whom they will do
business, where and when. The need for intense customer focus and exemplary
customer service will continue into the future, as customers remain central
to the growth of e-commerce.
Roy, CEO and Chairman, eGain
"Websites will become 'customer interaction
centers', where customers can access information and buy goods and services
on a 'self-service' basis."
Senior Vice-President of Products, Vignette
"The place from which you
buy things will blur. Customers will expect that companies provide a choice
- which may be tough to do from an infrastructure standpoint."
Cross, President, Venture Capital Online, Inc.
"If not used wisely, the
tools of the Internet merely enable marginal vendors to provide empty promises
slicker and faster - and they call it e-commerce. In the long run, it won't
work, because the customer is still king, and the Internet doesn't change
that. Although the Internet can indeed change processes and channel structures,
it doesn't change customer expectations. Even in the virtual world of the
Internet, customers still vote with their feet."
Better, Faster and Maybe Cheaper
With continued learning and experimentation,
companies will build better products and services by utilizing the multiple
capabilities of their own companies and also their partners. Price may still
be a determinant in customers' buying decisions, but value received is becoming
more important than price by itself. New ways to conduct business enabled
by technology will lead to many new opportunities for companies, with improved
choices for customers and more efficient payment mechanisms for the exchange
of value between parties.
Fisher, Vice-President of Corporate Strategy and Marketing, Intuit Inc.
nature of money will change. The physical need for it will disappear. This removes
the administrative headache from buying things."
Ostrow, CEO, Testmart
"Companies will get better at usability, navigation,
and e-commerce in general. There will be better products to buy."
Roman, CTO, diCarta
"There will be simpler payment schemes which will
make it easier for people to buy goods and services. Customers will have higher
expectations with sites as well - every interaction must be a positive experience."
6. Business Models and Value Webs
when you thought things were settling down with business models, be prepared
for more changes. Improvements in efficiency of the supply chain and logistics,
disintermediation and continuing complex are part of the future.
Alan Naumann, President and CEO, Calico Commerce
"There will be more collaboration than ever, and it will be much more effective.
We will apply what we've learned from manufacturing supply chains, and extend
successful partnering through to the customer."
Hullinger, Vice-President of Sales and Operations, Egghead.com
of service for the 'last mile' will increase significantly. Express carriers
such as UPS, FedEx, etc. will be faster and less expensive."
Brazina, Executive Director, Electronic Commerce Institute, LaSalle University
"The key to e-commerce profitability will be an efficient and effective system
to distribute products and services."
New Standards and Rules Create Opportunity
There has been much controversy
and discussion about privacy and security and how it affects e-commerce.
Quite often, new regulations and laws can be perceived as just more bureaucracy
that gets in the way of doing business. However, as security issues are
mitigated and standards are commonly deployed for security and privacy,
new opportunities will actually be created for business.
Walsh, Chairman and Chief Strategy Officer, VerticalNet
the Internet will disappear. With advances in technology and electronic
signature legislation, the privacy barriers start to disappear. It will
be easier for companies to acquire and maintain information about customers
in order to sustain lifetime customer relationships."
Fisher, Vice-President of Corporate Strategy and Marketing, Intuit Inc.
improved security and recent changes in legislation such as e-signatures, virtual
has become 'real'. This is one of the last holdouts where infrastructure was
still needed. With that barrier removed, businesses can come online much
Kaj Pedersen, Vice-President
of Engineering, Lycos Quote.com
"The Internet has become the method by
which many financial firms retrieve and advertise their services. With this
come issues that relate to security and a company's ability to disseminate
information. With the increase in demand for online trading and financial
services, the winners will be those who can exploit the opportunity for
real-time services, within a secure environment."
Evolving Infrastructure and Tools
Many advances have been made in integrating
front office and back office systems both in a company and via the ASP/BSP
model. Technologies that improve speed, collaboration or integration of
processes will be a requirement for survival and growth in the future.
Ashu Roy, CEO and Chairman, eGain
network effect of the Internet that allows businesses to collaborate will continue,
and that will mean economic efficiencies."
Foster, CEO, eConvergent
"The biggest opportunity for companies will be
the integration of all customer touch points in a reactive and proactive
way. This means a tightly linked infrastructure that ties marketing and
customer relationship management together."
Krainin, Senior Vice-President of Marketing, Sameday.com
will improve the speed and efficiency of existing supply chains. Internet-based
systems dramatically reduce the cost and complexity of connecting enterprises,
to make collaborative planning and optimization the rule rather than the
9. The New Face of Marketing
As companies continue to wrestle with issues about online and offline branding,
we are entering a new era of personalization. Marketing will be faced with
implementing new approaches in the Internet-enabled world.
Sterne, President, Target Marketing of Santa Barbara
"We are entering
the age of proactive or anticipatory customer service. Companies will target
customers and send personalized FAQs to serve their customers."
Vashistha, CEO, neoIT.com
"Marketing will change. There will be a need
to be more precisely targeted, more precisely customized. Niche players
may actually have an advantage in the future if they have solid customer
relationships in the markets they know. Also, brand will matter in the end,
but companies will have to find innovative ways to build brand loyalty because
there are very low switching costs."
Cohn, CEO, Brigade Corporation
"I believe that there will be less selection
and less free stuff online. Also, I think there will be less 'unjustified' customer
10. New Dimensions for Growth
As today's leaders make decisions about tomorrow's growth,
there are many factors at work in this new environment that will make a
huge impact. Technologies such as wireless and portable computing will provide
more ways to access the Internet, and require companies to provide content
accordingly. The world marketplace means greater demand for products and
services, and companies need to figure out how to build businesses across
geographic boundaries. We are faced with much growth in the next few years.
Whether it happens slowly or quickly, we all need to be armed with the lessons
we have learned so far to be better prepared to meet all the challenges
of the brave new world.
Akel, Alexandria, Egypt
"To die is losing the ability to change - not
the loss of breath."
Mark Resch, President
and CEO, CommerceNet
"Adoption of the Internet will continue to rise -
with or without the speculative enthusiasm of Wall Street. There is surprising
vigor around the world, and much enthusiasm for e-commerce. Clearly, these
are the early days - even in North America only about 10 percent of the
manufacturers have true e-commerce presence on the Internet."
will continue to behave like a complex, adaptive system. There will be no
single global control point or mechanism; the tangle of non-hierarchical interaction
will continue. The sophistication of global electronic commerce presences
will increase, and companies' behavior will change with experience. The
dynamics of the system make it unlikely that optimum equilibrium will occur in
the near future."
Bill Daniel, Senior
Vice-President of Products, Vignette
"There will be an increase in the
number of people who interact with the Internet and conduct e-commerce using wireless
Jorden Woods, Chairman and
CTO, Global Sight
"Mobile, wireless access to the Internet will be commonplace,
that will greatly accelerate globalization (no wait to get wired). And with
that, global standards for the wireless Internet will emerge."
wish to thank all of the people who made predictions and contributed quotes for
this chapter. These people from the "real world" will help shape our Internet-enabled
future in the next few years, and I am looking forward to sharing the experience
NOTE: At the end of each
E-Volve-or-Die.com chapter there is a number of evolutionary tactics listed.
Here are the evolutionary tactics associated with this chapter - "A View
from the Real World".
- A number of the old-fashioned
principles that worked in the Industrial age will work in the Internet age. You
don't have to start over. Don't relax, we are just at the beginning of the changes
brought about by the Internet age. Figure out how you can transition your company
to be successful online maintaining the brand you currently have in the physical
world or dethroning the brand of the current incumbent.
the use of the Internet the same as a standard commodity, like electricity.
intense customer focus and exemplary customer service; share value among all your
- Run many experiments and
continue corporate learning to create better products and services.
your business models and be prepared for continual evolution and change.
Government and private sector activities to bring about global standards in security
- Whether you run your
internal IT shop or outsource this function, integrate your front and back office
systems to deliver improved speed, collaboration and integration of processes.
on mass customized products and services.
prepared to embrace new paradigms as they become pervasive in society and help
deliver increased value to the customer.
me leave you with a few of my favorite quotes this month:
"Back to Basics" The year 2000 was a volatile year for eBusiness. The world witnessed
the dot-com meltdown and the realization that many B2B models and practices were
not mature enough to support collaborative business across the Internet. In a
rush to be Internet ready, some organizations ignored the complexity and difficulty
of integrating business processes across their extended supply chains. They were
also too optimistic about the technical capability of their infrastructures to
support complex business process integration. 2001 will be a year of reality.
Getting back to basics means that analyzing business goals and objectives, understanding
customers and markets and assessing operational/technical readiness to support
new eBusiness initiatives will be a top priority for every organization. (Kenneth
F. Fitzpatrick, General Manager, Global Marketing Computer Associates International,
It's only going to get uglier.
All those choices are going to get narrower and first to market will only
mean you opened the door for the best to come. If you're not the best choice,
best product, best service, you'll be last. And best will only last as long
as your next version can be introduced. (Aaron Heinrich, VP, NWRPR.com)
2001 is going to be a very difficult year.
The year of the truth. At the end of 2001 we will probably see the dot.coms
which will survive in the long run. Along that way there will be a lot of
businesses which will go out of business. Difficult times for e.g. Webvan
or etoys and many others around the world. (Patrick Stark)
I hope you enjoy this eZine.
See you in
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President, ECnow.com <http://ecnow.com>
Founder and Coordinator, SJSU-PD ECM Certificate Program <http://ecmtraining.com/sjsu>
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