Finally, a dose of dot.com common sense
(reprinted with permission from The Boston Globe, June 6, 2000)
by W. David Stephenson
Several of my friends who are brilliant e-marketers lost their jobs recently when toysmart.com closed its virtual doors. While I was sorry, I wasn’t surprised, because reality and common sense are finally tempering the ardor of those of us who once thought the Web would change everything.
Instead, what is emerging is a new model for companies. It combines the best of new media and old — approaches that should be both reassuring and challenging for older “bricks-and-mortar” firms that haven’t fully incorporated interactive experiences into their strategies.
What are the lessons of the dot-com shakeout?
First, just because consumers can do it online doesn’t mean they will. I can’t believe how many dot-coms impose additional tasks on consumers, with questionable benefits in return. Are you really willing to set up a separate account to buy a 25-pound bag of dog food and have it FedEx’d to your home — perhaps saving a buck — when you’re used to just adding it to your cart at the grocery store? The same thing goes for a wide range of dot-com specialty stores, such as those that sell drugs and vitamins. There may be an exception for long-term prescriptions, but in general I want to get toothpaste now, not wait several days for it to be shipped.
Second, perhaps there are limits to the “disintermediation” that’s possible because of the Web. Not all intermediaries are bad. Take two of the areas where dot-coms have made major inroads: online investing and travel. I appreciate the way they can streamline the buying. However, even sites that have artificial intelligence can’t really help you with complex issues. Recently, I got to a company meeting in Miami for half the cost and in half the time, compared to my coworkers, who had bought their tickets online. How? I went to my neighborhood travel agent. He uses Web services, but also brings years of experience to bear: He knew that by purchasing a package - including a hotel room that I didn’t use - I could get a bargain price.
Next, a “clicks-and-mortar” synthesis of virtual and physical entities presents important benefits for consumers and companies. I never bought from toysmart.com, despite the fact that it was informative, attractive, and offered good prices. There’s a fun storefront toy store two blocks from my house that has many of the same toys at slightly higher prices, but it lets me open the box, play with the toy, and easily return it. Another person might love the ease of online toy buying, but want to try on clothes before buying them. The point is that a pure-play e-commerce site doesn’t have that full shopping experience.
In my early enthusiasm for e-commerce, I gushed about how pure-play online firms would not be saddled with all of the old logistical problems. Yet what is Amazon.com doing? Building warehouses and making major investments in logistics!
As long as we’re still buying books on paper, logistics and infrastructure will matter. Companies that combine the best of both - a physical store where you can browse and enjoy a latte, plus a Web kiosk where you can order from a wider stock of books that can’t fit in the store - will be increasingly attractive. Bricks-and-mortar companies themselves must incorporate e-business into every aspect of their operations. Those that do a good job of combining interactive experiences with a human face will do well in the brave new world of e-commerce.
(c) Copyright 2000 Globe Newspaper Company.
