Every
time I see a scrubbed-faced cue-card reading newscaster on
CNN referring to the Information Superhighway I
chuckle a little because I know that our “highway” is
really more of a Yellow Brick Road. After all, this
road promises us glittery interactive wonders far beyond
anything in our dreary old paper relationships. It really does
sound to me like a full color Oz to our seemingly
black and white “Kansas”.
In
contrast to the “Somewhere Over The Rainbow”
promises of the Internet, and especially of shopping on
the Internet, this is an in-depth look at the business
systems and processes both expected and needed
to conduct Internet Commerce either to consumers
or business to business.
This
is a strategic and logistical analysis of the in-house
infrastructure you will need to succeed in I-commerce…not
in terms of network connections, bandwidth pipelines, and
hardware controls, but specifically, this book looks at the
functionality that MUST be available in the software
powering an Internet Commerce web site and in the business
processes that must be in place.
The
journey along this yellow brick road begins at any one of a
number of portals…web sites created to become your
starting place online. Created as the hottest real estate
properties on line, these roosting grounds for the winged
monkeys of banner ads and hot links make a small fortune
(from ad sales and affinity programs) for their owners and
serve as a point of interest for consumers.
You
can think of these as different points of interest all
leading to the same place…not unlike a scarecrow, a tin
woodsman, a cowardly lion, or even a little girl from Kansas
all headed to the same Emerald City. Each portal has its own
interest concentration area, but each is headed toward the
great treasures of the World Wide Web. Some are strictly
search engines or search engines combined with other
features or interest areas. Some are news or sports pages.
Some are entire services like AOL (America On Line) or MSN
(the Microsoft Network).
Portal,
of course, means doorway, and these web sites are designed
to be the doorway to the Internet for thousands of
subscribers or customers. In fact, Jupiter Communications,
one of the leading Internet research companies, has cited
portal web sites as being among the most profitable on the
Internet.
The profit is generated by enticing a captive audience to
the site…getting the consumer to make this site his or her
gateway or homepage every time they open the browser and
sign on. Once the portal site can point to a definitive
captive audience, then advertising space on the portal page
can be sold on the basis of the number of impressions of the
ad seen in a given time period by a specific type of
consumer. The advertising space is known as Internet real
estate.
We
all have portals; there is no way around it. The browsers
come with fixed portals built in, but most moderately
sophisticated users can change that fixed portal…and some
sites now contain buttons to click on to “make this your
home page.” In my case, I have moved my portal page to a
site that gives me stock information for my portfolio, news
headlines, baseball scores for the two teams I follow, and a
powerful search engine to search the entire web.
In
any case, your portal is your gateway to the rest of the
Internet…and it matters very little whether you begin your
journey from Yahoo or AOL; from a Kansas twister or from a
scarecrow’s corn patch; from iturf.com or Netscape; from
Munchkin-land or from the Tin Man’s rusted stand in a rain
forest. They all follow the yellow brick road.
Traveling
from your portal, pick any on-line store; they get fancier
and more glitter-laden constantly trying to get your
attention and retain you once they have it. Streaming video,
Liquid Audio®, three-dimensional VRML worlds,
live fashion shows, product zoom-in details, personalization
that not only remembers your name but even suggests products
to you based on a psycho-graphic profile created by your
click stream through pages… all of these and a hundred
more storefront bells and whistles make the horizon from our
yellow brick road even more attractive.
These
features, with a myriad of constantly growing others, create
dazzling storefronts that truly do rival the Emerald City of
Oz. And as you enter any one of these stores (with what ever
methodologies drove you there) you are even further courted,
polished, and enticed as you move toward the great and
powerful wizard known as shopping.
The
driving force of all of the emeralds in the city, of the
entire dazzle, is to get you to offer up your credit card
number and shop…not just once, but as a repeat customer.
Therein is the magic. Therein is the wizardry. There in is
the great and powerful Wizard.
Oh
but if the glassy-eyed consumer only knew what was going on
behind the scenes, underlying the high-tech dazzle and all
the bells and whistles! A peak behind the curtain would
reveal a sad mockery of the otherwise cutting edge
technology.
PAY
NO ATTENTION TO THAT MAN BEHIND THE CURTAIN
Poor
Dorothy; she found out the truth the same way far too many
on-line consumers find out the sad and hollow truth about
Internet shopping. Most sites are merely an illusion of real
time technology. Most sites are tragically an empty shell
behind the grandest of storefronts.
Take
a look with me at some of the things that typically go on
behind that curtain and see if you think that the strings
are being pulled by the great and powerful wizard, or
in fact by a humbug.
1.
At the 1999 National Retail Federation conference
and trade show, one of the nation’s most prominent (and
over-priced trendy) department stores explained the behind
the scenes operation of their e-commerce web site:
“We
have a state-of-the-art web site that allows customers to
pass along virtual aisles of an on-line store, pick products
from the shelf, examine the details of the products and
order them,” a proud VP explained.
He
went on to describe, “You can even pick clothing items
off of a shelf and try them on 3d computer mannequins which
you can choose to look like your own body type.”
But when asked about how the
order is fulfilled, he took a long exaggerated deep breath
and gathered the nerve to answer, “Welllllll…the
order is automatically printed to our LaserJet®
printer. Next we have an employee who circles the actual
items ordered and the number of items for that Stock Keeping
Unit (SKU) and faxes the order to our midtown store. Every
Thursday morning, before the doors open, one of our
department managers pulls all the faxes and locates the
items in the store and puts them into a mailing envelope. If
the midtown store does not have some of the items in stock,
then we have an entire fax tree set up so that midtown faxes
it to another store; if they don’t have it, then they fax
to a third pre-assigned store and so on until the item is
located. It is great. It is store-sales without customers in
the store. The managers love it,” he detailed.
God forbid that a customer might
call (or worse yet return to the web site) to check on the
status of that order. Alas, there is not much behind that
fancy three dimensional mannequin curtain except, as Dorothy
noted, “a humbug.”
2.
Another retailer, a very successful shopping-mall
bricks-and-mortar store with more than 600 locations
launched a web site that generated e-mail orders. Within 15
days he was generating 60,000 new visitors per day and
converting 15% of those to on line orders (9,000 orders per
day)…a pretty impressive feat.
But his inventory and shipping
system was set up to move bulk…to move cases of
merchandise from his distribution centers to his stores.
“My god, I am breaking open a
case here of this product and another case over there for
another product, and I have to package everything for
onsey-twosey orders,”
he complained to me as he vented frustration over the entire
pick-pack-and-ship process.
“I sell a $7.50 product on
line, and in labor, split cases, inventory maintenance and
tracking, it costs me $15 to process the order…and that is
before shipping,”
he almost cried.
“There must be an automated
way to do this,” he added.
3.
A young marketing vice-president, who I know pretty
well, recently visited an over-publicized on-line bookstore
from her AOL Internet connection at home. After struggling
for about 25 minutes to locate the book she wanted and drop
it into her “shopping cart”, the site announced
that the browser she was using was not supported by the site
and if she wanted to complete the order she would need to
call an 800-phone-number.
Frustrated,
she decided to complete the order from the T-1 speed direct
Internet connection and the state-of-the-art web browser at
her office. Three days after she finally placed the order,
she received an order-confirmation e-mail, acknowledging
that the order had been placed.
She
later lamented to me, “It took THREE DAYS in this
supposedly interactive real connection? Bah Humbug. I could
have gone to the store and bought it or better still,
ordered from a catalog.”
Humbug
indeed, she had just experienced the consumer’s version of
Dorothy’s man-behind-the-curtain.
4.
By
far, my favorite story is of a major national toy retailer
who filled Christmas Internet orders by buying roller skates
for a team of order fillers to glide along the aisles of one
of the retail stores, pulling items off the shelf. No
inventory system. No picking and packing system. No tracking
system. And a bizarre host of nightmares for the store. At
long last, fortunately, they realized they needed more than
a hollow web storefront.
IF YOU WOULD LIKE TO READ MORE OF THIS BOOKLET, CONTACT
GARY GREEN DIRECTLY FROM THE "CONTACT" PAGE OF THIS
WEBSITE
