By William Stocking, Principal, Northbrook Consulting Group Last week
we looked at the necessity of having a website unencumbered by
excessive graphics and gimmicks, about how the web has changed but the
fundamental concepts have not. It was also strongly suggested that
corporate management become knowledgeable in the limitations of the
medium and therefore develop realistic expectations. This week we will
briefly touch on products and services on the Internet: what works and
what doesn't.
PRODUCTS
Products suitable for selling on a web site can range from toys to
automobiles to real estate. (If you pick toys, I hope you do a better
job of planning than Toys-R-Us did this last season.) Some products
lend themselves to E-commerce more than others; look at what you sell
very carefully before taking the plunge.
Some categories of product benefit very little from being exposed on a
web site. Fast food, groceries, and other commodity items are not good
candidates for E-commerce. Businesses that survive mostly on the
strength of a specific location are not likely to benefit from having
a web site. Your corner gas station is not a candidate, nor is the
Laundromat.
Traditional mail order businesses are the most obvious candidates to
benefit from E-commerce. For one thing, a mail order company is
experienced in handling the back-end part of the
business--fulfillment. Problems in that area plagued many new and
unprepared online retailers (such as Toys-R-Us) this last holiday
season.
As we will discuss in future issues, the E-commerce paradigm rewards
early successes in a product or service category regardless of the
existing distribution channels. Most of the publicized successes have
been "newcomers", like amazon.com who weren't even on the booksellers'
competitive radar before their launch. It would seem that an
established company would have the advantage in this regard. But few
have recognized the fundamental strategic changes and breakneck speed
needed.
DISTRIBUTION SHIFTS
For an example of the shifts in product distribution that have been
brought on by the Internet one need look no further that the computer
software industry. Today, there are many hot selling titles that can
only be bought on the Internet. Software is the quintessential E-
commerce product. Many developers began by offering free test copies
of software that could be delivered with only a download. Now many
commercial software packages are sold via direct download, some with
extra charges for physical delivery of documentation and media.
For the customer, there is instant delivery of the product. For the
manufacturer, the production and delivery cost is virtually
nothing-just the cost of running the website with sufficient capacity
to download. For the traditional distribution channel, there is a new
competitor and another threat to survival.
SELLING SERVICES
Does your business supply a service that can be utilized countrywide
or worldwide? If so, then a web site should be a part of your overall
promotional program. The more unique your business, the better it will
work. Example: if your business repairs vintage clocks you might not
be able to survive from local traffic if you are located outside of a
large city. However, a web site can help you expand the reach of your
business to the rest of the world, making it far less dependent on
physical location.
One web site we manage, a directory of management consultants, has
been successful at generating business for several members. One
member, a restaurant consultant, has expanded his business to other
parts of the country. He almost has more business than he can deal
with and can be selective in choosing clients. Moral: the more unique
the service, the better chance of generating new business from
Internet exposure.
But just having a web site is not enough. People have to be able to
find it and have a reason to want to do so. And once they arrive, they
must be able to find what they want easily and rapidly. As you might
suspect, we will discuss these aspects in future issues.
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Here are the major stories on E-Commerce and Y2K this week. Please
feel free to contact us for additional information on any of these
clips.
Topics for this week include:
######### INSTANT MESSAGING ENTERS REALM OF ONLINE CUSTOMER SERVICE
######### EXCHANGES OFFER TO EASE THE HEADACHE OF SELLING OVERSEAS
######### GARTNER: BUSINESS-TO-BUSINESS E-COMMERCE TO HIT $7.3
TRILLION BY '04
######### FOOD FOR THOUGHT--A CHAT WITH ELLEN MARRAM, PRESIDENT AND
CEO OF EFDEX
######### US GOV'T IT LEADERS SAY Y2K WORK IS PAYING OFF
######### SO-YOU WANT A WEB SITE, PART 2: WHAT SELLS
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>>> Weekly E-Commerce and Y2K Update-January 16, 2000 <<<
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We thank you for your suggestions on making the transition from Y2K to
E-Commerce coverage. The main consensus is that we will continue to
pare back Y2K coverage, limiting it to noteworthy news, commentary or
stories involving both Y2K and E-Commerce.
We will try to keep the report shorter, and we will continue to
summarize the stories at the top. The weekly frequency and our desire
to give you the latest information doesn't allow us to do more than
superficial editing. We have considered just giving the web links to
stories, but rejected it because it would require additional effort to
see the stories you are interested in. As an e-mail document, it's
much easier for most readers just to read or print selected stories-or
even to hit the "Delete" key if there's nothing of interest.
Please continue to send us feedback on how well we are meeting your
needs. If you do not receive this update directly and would like to
get your own complimentary copy, just send us your e-mail address.
Send either to northbrookconsulting@mail.com for html version or
wrs@firstbiz.com for plain text version
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Here are the major stories on E-Commerce and Y2K this week. Please
feel free to contact us for additional information on any of these
clips.
Topics for this week include:
######### GARTNERGROUP'S LAWS OF TECHNOLOGY-ENABLED MARKETING
######### 23 MORE CARRIERS JOIN AIRLINE E-COMMERCE SITE
######### ONLINE HOLIDAY RETAIL SALES HIT $7 BILLION IN U.S., JUPITER
REPORTS
######### E-BUSINESS REDEFINES INFRASTRUCTURE NEEDS
######### DOW CHEMICAL COMMITS TO E-MARKET
######### Y2K OPENS DOOR TO NEW ERA OF E-COMMERCE GROWTH
######### PENTAGON SAYS IT ERRED IN Y2K FIX
######### COMMENTARY: THE Y2K BUG REPELLENT WASN'T A WASTE
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>>> Weekly E-Commerce and Y2K Update-January 8, 2000 <<<
by Donald L. Joseph, CMC
The Y2K success stories that are gushing from all sources point out that a major benefit of the Y2K effort was awareness. Executives and directors became aware of the dependence of the
organization on information technology, both internally and externally.
We still believe that some success stories will have unhappy endings similar to those of Hershey Foods and Royal Doulton. They both finished their installations months before the January 1
deadline. Remember, many companies knew for sure that their old systems would not work after 1999. Therefore they had no choice but to begin using their new systems before year end.
One of the last phases of most systems projects is user training. Most of these new systems have a totally different "look and feel" than the systems they replaced. From top executives to
first line personnel, people are dealing with new screens, reports, procedures, and error routines. The hardware and software may be functioning exactly as expected. Are the people?
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Here are the major stories on E-Commerce and Y2K this week. Please feel free to contact us for additional information on any of these clips.
TOPICS FOR THIS WEEK INCLUDE:
######### INVENTORY ISSUES OBSCURE MARKET VISIBILITY
######### MAJOR FINANCIAL INFORMATION FIRM APPEARS TO HAVE SUFFERED SERIOUS Y2K DAMAGE
######### Y2K-ECONOMIC BOOST
######### MILLENNIUM BUG COULD STILL ATTACK SUPPLY CHAINS
######### A WEB AUCTIONEER ROILS THE RUST BELT
######### E-COMMERCE'S NEWEST PORTALS ARE, SURPRISINGLY, TRUCK DRIVERS
######### COMMENTARY: WHY SO ANGRY?
>>> Weekly E-Commerce and Y2K Update-January 1, 2000 <<<
by Donald L. Joseph, CMC
As hoped, we made it through the century date change without any catastrophic failures being reported. Even the countries with the most suspect technology seem to have avoided major failure so
far.
Organizations still face the challenge of motivating their people to remain vigilant for symptoms of problems, both internally and externally. Whether the cause is unremediated Y2K problems
in hardware,software, or embedded chips, training issues with new systems, ormalicious software (viruses or worms), it is too early to claim totalvictory.
On the bright side, organizations that have upgraded their information technology to avoid Y2K problems, can now focus on integrating it into their E-Commerce strategy.
Once again, we invite your criticisms and suggestions for making this update more valuable to you. May the year 2000 be all that you want it to be.
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Here are the major stories on E-Commerce and Y2K this week. Please
feel free to contact us for additional information on any of these
clips.
Topics for this week include:
######### THE BUG DIDN'T BITE
######### USABANCSHARES TARGETS E-BUSINESSES
######### LAWYER ADVISES GEARING UP NOW FOR Y2K SUITS
######### CONSUMER E-COMMERCE NEEDS MORE CUSTOMER FOCUS
######### SIA SAYS WALL STREET READY AFTER MINOR PROBLEMS FIXED
######### EXPERIENCE HELPS: E-SHOPPING UP 300% THIS SEASON
######### ONLINE PROCUREMENT MEETS E-BUSINESS PURCHASING
######### WHY WE OWE OUR THANKS TO THE Y2K PROBLEM AND HOW WE CAN
LEARN NOT TO FAIL GOING FORWARD
>>> Weekly E-Commerce and Y2K Update-January 1, 2000 <<<
by Donald L. Joseph, CMC
As hoped, we made it through the century date change without any catastrophic failures being reported. Even the countries with the most suspect technology seem to have avoided major failure
so far.
Organizations still face the challenge of motivating their people to remain vigilant for symptoms of problems, both internally and externally. Whether the cause is unremediated Y2K problems
in hardware, software, or embedded chips, training issues with new systems, or malicious software (viruses or worms), it is too early to claim total victory.
On the bright side, organizations that have upgraded their information technology to avoid Y2K problems, can now focus on integrating it into their E-Commerce strategy.
Once again, we invite your criticisms and suggestions for making this update more valuable to you. May the year 2000 be all that you want it to be.
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Here are the major stories on E-Commerce and Y2K this week. Please feel free to contact us for additional information on any of these clips.
Topics for this week include:
######### THE BUG DIDN'T BITE
######### USABANCSHARES TARGETS E-BUSINESSES
######### LAWYER ADVISES GEARING UP NOW FOR Y2K SUITS
######### CONSUMER E-COMMERCE NEEDS MORE CUSTOMER FOCUS
######### SIA SAYS WALL STREET READY AFTER MINOR PROBLEMS FIXED
######### EXPERIENCE HELPS: E-SHOPPING UP 300% THIS SEASON
######### ONLINE PROCUREMENT MEETS E-BUSINESS PURCHASING
######### WHY WE OWE OUR THANKS TO THE Y2K PROBLEM AND HOW WE CAN LEARN NOT TO FAIL GOING FORWARD
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>>> Weekly Y2K and E-Commerce Update-December 25, 1999 <<<
This will be the last 1999 weekly update! We wish you a Happy and Healthy New Year.
As the local media are now covering the year change with a vengeance, we will try to devote our Y2K coverage to material that might be missed by them and we think will bring new knowledge to
you. We will step up our coverage of E-Commerce with a similar focus.
Our first story, on Toys 'R' Us and toysrus.com, highlights one of the key values common to web ventures-meeting customer expectations for web-based businesses. The "dot.com" businesses that
have proliferated, and resulted in amazon.com's CEO being named Time magazine's "Man of the Year", have resulted in expectations of delivery performance and real-time information feedback
that far exceed those of "bricks and mortar" businesses.
Many of the most successful dot.coms, measured by equity value and revenues, have never had a profitable quarter and don't even predict when they will have one. They have designed their
businesses completely around their E-Commerce model and are still making vast investments in their E-Commerce infrastructure.
Whether business-to-consumer or business-to-business, an organization embarking on an E-Commerce venture must understand the expectations it will create in its customers not only from the
content of its web-site but also merely because it is a web-site competing in the dot.coms' milieu.
The Toys 'R' Us story of customer disappointment will not be unique, we fear. We have been involved in several potential consulting engagements where the prospective client wanted to create a
web-based front end for an existing business. The intent was to make few changes to the way the company operates, except for order entry, until the web volume required it. In one case this
was "because our customers are demanding it". There was to be no real-time information sharing with customers, no change in access to inventory, and no change to delivery standards.
But why would the customers demand it if they didn't have some expectations for improvement in these areas? The answer to this question is critical and requires careful evaluation of the
organization's objectives and the deployment of its resources to meet them. While ignoring the impact of E-Commerce on an organization's strategy is risky, an ill-conceived E-Commerce
strategy can compound those risks and hasten the day of reckoning.
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>>> Weekly Y2K and E-Commerce Update-December 18, 1999 <<<
by Donald L. Joseph, CMC
You may notice a change in the title of this Weekly Update-the addition of "E-Commerce". We have been targeting this report to senior executives, directors, and fellow management consultants
with a goal of focusing on Y2K as a strategy and governance issue-not merely a technical issue. We intend to focus on E-Commerce the same way.
There are many similarities between Y2K and E-Commerce, when viewed from this perspective:
-
Both evolved from technology issues into organization-wide strategic issues;
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Both represent major opportunities or major threats, depending upon the action or inaction of senior management;
-
Both can involve major budgetary commitment over a long period of time;
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Many companies have deferred their E-Commerce initiatives pending completion of their Y2K programs;
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Many organizations have installed E-Commerce-capable replacement software as part of their Y2K programs;
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E-Commerce strategies require careful consideration of the needs and capabilities of business partners upstream and downstream in the supply-chain, as do Y2K strategies;
-
We don't think that the Y2K issue will go away, nor do we expect January 1, 2000 to cause many catastrophic business failures to become apparent. But we do think that the number of new
issues will decline over time.
We invite your comments and recommendations, on this format change. Please let us know how we can make this Update better serve your needs. If you know of people who would like to be added to
our free subscription list, please let us know. We can be reached at djoseph@idt.net.
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Here are the major stories on Y2K and E-Commerce this week. Please feel free tocontact us for additional information on any of these clips.
Topics for this week include:
######### CIO SURVEY FINDS E-COMMERCE IS TOP STRATEGIC PRIORITY
######### DOWN TO THE WIRE FOR Y2K
######### E-BUSINESS MUST CONSIDER ITS CUSTOMER
######### THE Y2K SOLUTION -- BUGS SQUASHED, COMPANIES LOOK TO E-COMMERCE
######### SAP SAYS WANTS MORE INTERNET PORTAL DEALS BY END-99
######### U.S. READY FOR Y2K, BUT ON GUARD FOR VIOLENCE
######### Y2K LAWSUITS
######### MIT'S ADVISORY ON Y2K: BEWARE
######### E-TRANSFORMATION: THE NET HELPS OVERHAUL MANUFACTURING
######### E-TRANSFORMATION: THE FAST TRACK TO BECOMING AN E-BUSINESS