Net-assisted sales will comprise one quarter of global gross domestic product by 2000, while revenues generated by ecommerce will rise from $2.6 billion in 1996 to $220 billion in 2002 a conference focused on the Web was told this week.
Moreover, while 40 per cent of US companies were undertaking some form of ecommerce in 1997, 63 per cent are expected to do so in 1998. This is all according to Brad Grob, vice president of multimedia authoring tools supplier Geo Interactive, who was speaking at the Web Design and Development 98 show in San Francisco.
Emily Davidow, founder and president of Web development and consultancy company Digitial Elements, explains that online selling started taking off during the holiday season last year and has not slowed since. This year per store sales were an average of $94 million, double the 1997 average of $41 million.
Jakob Nielsen, Sun Microsystems' distinguished engineer, projects that ecommerce will be as big as a trillion dollar industry within five years.
"By the year 2003 the big sites will generate a quarter of a trillion dollars in revenue and advertising. The small ones will generate about a trillion dollars between them as there'll be a lot more of them. We'll hear a lot about the big ones, but the small ones will make money too," he says.
He continues: "The main problem at the moment is that there's no way for small sites to be compensated for what they're doing. They need a way to generate revenues, but most people don't understand how online advertising works. In the offline world, the important thing is how many viewers an advert gets, but that's irrelevant on the Web. It's about how many relevant users see your ad and buy from it."
However, he warns that it is a dangerous strategy to wait until the Web really takes off to develop an ecommerce strategy.
"You can't wait until the Net truly happens before you jump in because it is mainly an organisational learning issue rather than a technology one. It's a matter of having it ingrained in a company. Everyone is doomed to have their first Web site be a disaster. You have to go onto the Web, try it out and then reorganise your business processes," he believes.
Michelle Pettigrew of Onsale, a Web-based auction site for computer equipment, advises users to begin with the end in mind when designing their electronic marketplace and, most of all, to know their customers.
"Don't believe that just because something works in the ordinary world, it will work in the ecommerce world. You have to listen to the customer - ask them what they think, do reader surveys, test marketing. You can get a lot of feedback from them?.ensure that the Net is the right place for you and you can add value to the customer," she said.
Too many sites are just catalogues and do not offer consumers any real benefits she explained, but to design a good site it is necessary to be very focussed. Quite a lot of money is also needed to develop brand recognition, so things like affiliate sites and bot engines such as Excite are a useful medium to obtain broader coverage.
Michael Lindsay, strategy director of TP & Register, a Web-based financial bureau, believes there is a lot more to consider than just lowering sales costs.
"Talk to all the relevant people. You need to think about the potential repercussions on the business and you need upper management approval if you're setting up an ecommerce site that affects the whole business. Understand what the return on investment is at the end game and as you go on your way," he advises.
If possible, tie staff careers or salaries to making the Web site successful and link bonuses directly to the success of the project.
Erina Dubois, analyst at Dataquest, agrees that ecommerce is now a key part of the business and has to be integrated into it. But she believes that organisations need to be honest with themselves whether they have a product that is suitable to sell over the Web because marketing costs alone are very expensive.
Consultant Michael Wilson reminds users that the main purpose of an ecommerce site is to make money rather than an excuse to play about with the latest technology. As a result, it is best to measure the success of the site by the profit it makes from selling things rather than the number of hits it gets.
"It sounds obvious, but it's amazing how many people forget that," he says. "You want it to be like a successful retail business and a lot can be gained by looking at successful retail chains like Macy's to see how they do it."
In reality, the most important site feature is getting customers to see the things you want them to buy by making them prominent or pointing them up in special offers, he continues. It is also useful to send them a daily emailed newsletter about what is on the site, what offers you're providing and other highlights.
Make sure that presentation is clear because if the site is too packed with items or gizmos, people will find it too much hassle to use it. Also ensure the Web site and its features work well rather than just being cool because if it breaks people are unlikely come back.
After the site is live, ask the user what they think and what they would like changed - if you don't listen to them, they will leave, he explains. When you get user suggestions, thank them, think hard about their suggestions, implement the ones that make sense and ask for more input.
Customer support is an extremely important feature too, and all questions should be handled on the day of receipt.
Finally, ensure you have a scaleable site. Buy enough capacity to handle the initial traffic with some room for growth, then scale it up as appropriate.
Geo Interactive's Grob says the technology behind Web sites is not as relevant as it was two years ago. Site design, the user interface and the media elements are all more important, he believes, because they make the shopping experience more interesting.
"Online shopping is mostly flat at the moment and provides an unemotional description of products, just pictures and product shots. To evolve beyond where we are today, we'll need much more multimedia such as an audio-based greeting, background music and video," he says.
According to surveys, 68 per cent of Web sites that used multimedia found it increased traffic, 33 per cent said it lengthened the time of the visit, and 16 per cent said customers bought more as a result of it, he explains.
"It makes sense if you think that you're presenting users with a more exciting experience. But multimedia is vastly under-utilised and only about 200 or so Web sites today are actually using it," he adds.
As for brand marketing on the Internet, Tom Wang, director of strategic services at corporate Web site builder Organic, says users should not throw the baby out with the bathwater and panic because they feel their brand could go out of control.
"It's vital to understand what you're doing and remember that things like the consistency of image, tone and manner are still important. You need to think about whether you define the brand by what the audience is looking for or by line of business, and how you respond to criticism because the Web is much more interactive and you get more information than you know what to do with. The devil is in the detail and tactical issues are important," he explains.
According to a user satisfaction survey, what most people want is a site that loads quickly, followed by the ability to find information quickly, and to find the information they need. They also want - in order of importance - access to timely information, ease of use and a site that looks great.
Consumers are still reluctant to buy online becvause of a lack of trust says Digital Element's Davidow. The Web seems less concrete than a regular shop, less comfortable than a catalogue and users often haven't heard of the vendor.
The best solution is to disclose company policies upfront such as shipping charges and reimbursement procedures if things go wrong. This also stops customer service departments from being bombarded.
Also explain how an order process works and provide information so people can contact you directly. Use a secure SSL server for transactions and inform your customers you are doing this, so they are reassured about security, Davidow advises.
Provide alternative payment methods such as phone or fax because customers often like the personal interaction this involves and if possible, show you've got outside validation from a company like Truste, a financial reviewing body for the Internet.
Include a privacy statement that discloses what information is included in a customer's records and how it is used, but also provide an opt-out clause for those who do not want information held on them.
On the site keep choices simple where possible and cut out slow-load extras unless they add value. Speed navigation through to quitting the site because it can make a real bottleneck.
After taking an order send immediate confirmation with estimated arrival time, a tracking number and a contact point.
While this may seem to be an awful lot for a Web developer to remember, Jakob Nielsen says that such IT professionals will be key to the economy in future.
"Once we move to the network economy, Web design will become a core competency. The Web will become the interface to the outside, providing the sales force, support and services and the store front. Having a poorly designed Web site will be the equivalent of having a shop that's always closed and a rude sales force. Designers will be key because we need to make Web sites useable," he explains.
Michael Sippey, publisher of Stating the Obvious Web site, which provides information on the Internet, believes that the whole role of the organisation will change as a direct result of the Web.
"As the size of the network expands, the size of the firm will be driven to zero because there's less incentive to be vertically integrated. You can now have someone to manage all the backend technology for you, so all you have to do is sell, attract and retain customers and make them buy through you. But if you're focussed on the backend, a seller could come and steal your customers," he concludes.
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